Talk:Regressive tax

um..."Regressive tax" anyone?

ok, both the article and this talk page focus a lot on how fixed charges equally applied to all may "appear" regressive in their net effects, but what about an ACTUAL regressive tax, esp on income? e.g. one where a $100k earner pays 30%, say, but a $200k earner only pays 25%? and not after a lot of tortured analysis involving deductions, tax incidence, family budgets, etc. etc., but where the actual BRACKETS are regressive?

THAT is the true meaning of a "regressive tax" - why does the article not even MENTION it?! 66.3.106.3 (talk) 02:03, 26 July 2011 (UTC)

The first sentence of the article covers the correct definition, then the rest of it leads into the incorrect definition. A flat tax (e.g., 10% applied consistently to all consumption or all income) is *not* regressive from a strict definition point of view. This turns the article political. — Preceding unsigned comment added by 205.166.254.3 (talk) 09:37, 18 October 2011 (UTC)

Can you provide a reference for that definition? The number one google hit for regressive tax is this article. The number two google hit states, in the lede, that a uniform tax is regressive.50.147.26.108 (talk) 18:58, 7 January 2014 (UTC)

Poll Tax

“Poll tax” means something very different in British and American English. In the United States, it was a tax that you had to pay to vote.

That's not quite correct: see the poll tax article which has a good explanation. Ellsworth 21:35, 18 Dec 2004 (UTC)

How does the author define "rich"? When he says "it is suggested", who or what suggests this? Is this an article to inform or an article to persuade?

Comments

"A regressive tax is a tax which takes a larger percentage of income from people whose income is low"

Now we're talking.--Jerryseinfeld 03:00, 8 Jan 2005 (UTC)

Just curious, besides other problems I have with it, doesn't it potentially charge more real money from people with less? For instance if you have a 10% tax for people with 10,000 income and a 9% tax for people with 20,000 income, someone with 19,000 income is going to be paying 1,900 while someone with 20,000 income is going to be paying 1,800. Are there countermeasures in place in most regressive taxes?--Mr Bucket 23:04, 5 September 2006 (UTC)

In the example you gave, it is more likely the tax is on income, not people. In that case, the first 10k income would be taxed at 10%, and the next 10k would be taxed at 9%, so someone making less would never pay more real money than someone making more. —Preceding unsigned comment added by 71.201.189.205 (talk) 16:32, 4 May 2009 (UTC)

Okay, a tax classified as regressive charges a larger percentage of income from someone with less money than someone with more money - AND? So, quality-driven, rich guy buys the same, 'Consumer Reports best buy', car as quality-driven, poor guy for $20,000 and they pay the same sales tax. Yes, poor guy pays a greater proportion of his income but also he gets the same product as rich guy. Right? IMO, this is a flat tax. Everybody pays the same amount and gets the same value. Am I being obtuse? Are opponents suggesting progressive sales taxes? If so, how would that work?Ahdee&m (talk) 15:29, 18 April 2010 (UTC)

What you describe is a proportional tax, not regressive nor progressive. Sales taxes can be made to have progressive effects. Many of the exemptions in common sales taxes are intended to decrease the burden on necessities, while they sometimes add excise or sales taxes to higher luxury items. Essentially, in consumption or income, your adjusting the tax base. Another method would be a tax rebate (something like the FairTax proposal in the U.S.). Morphh ^(talk) 17:16, 18 April 2010 (UTC)

Social security payroll tax

"only half of that is visible to wage-earners"

What does that mean?--Jerryseinfeld 03:01, 8 Jan 2005 (UTC)

I believe the author is saying that wage-earners see taxes taken out of their paychecks at half this rate; the employer pays the other half.--fsufezzik 20:04, August 12, 2005 (UTC)

Examples of Regressive Taxes

Why don't you just write that all flat taxes are regressive taxes? Isn't all VAT taxes regressive since the stupid poor person must pay VAT on everything he buys, while the smart rich person can save and invest for the future of our nation?--Jerryseinfeld 03:10, 8 Jan 2005 (UTC)

Well, it's not necessarily true that all flat taxes are regressive. In practice, most flat taxes that we see in real life tend to be regressive for the reasons you mention. But a flat tax on, say, caviar, could be progressive (poor people spend 0% of their income on the tax, but rich people spend some positive percentage). Any flat tax on a luxury would likely be progressive. And of course a flat income tax would be a proportional tax if there were no exemptions, deductions, tax shelters, etc. (unrealistic, but we're talking theory here) --fsufezzik 20:10, August 12, 2005 (UTC)

Actually, this isn't true. As people wiht larger incomes spend more on consumption as well as investment, VATs are actually progressive although at a declining rate. --jglassman

Isn't a "declining rate" the definition of regressive? John Moser (talk) 16:23, 29 August 2019 (UTC)

Might be a good idea to include the British Television licence as one of the more esoteric regressive taxes Shermozle 12:46, 12 October 2005 (UTC)

Sales tax is another example of regressive tax, in not just my opinion, since the very nature of being below the poverty line means you have to spend a much higher percentage of your income just to survive. The only reason I didn't modify it myself already is because I sense there would be a bit of a coup over it. There is far too much devisive politic based bickering in economics; is it just me or has it gotten worse in the last half decade?

This statement is incorrect. A (retail) sales tax is equivalent to a VAT: both are taxes on consumption, just collected at different points. Neither one, however, is regressive provided that they are uniformly applied. Consumption taxes are time-neutral, and so the amount taxed (or, more precisely, the present value of the amount taxed) is the same whether it is saved today and consumed tomorrow or whether it is consumed today; thus, the poor individual who has low savings and the wealthy individual who has high savings both end up paying taxes on their entire lifetime incomes. See Value-Added Taxation: A Tax Whose Time Has Come?, by Gilbert E. Metcalf, The Journal of Economic Perspectives (1995). In practice, many US state retail sales taxes are not uniformly applied; for example, they tax goods and services at a different rate. When the tax is not uniform, the it may end up being regressive or progressive depending on buying habits. Danculley 19:51, 3 December 2006 (UTC)

I've heard this flat over time fallacy about sales taxes repeatedly on this site, but if the wealthy spent all of their money eventually during their life times then why would there be wills? Why would all five children of Sam Walton (founder of Wal-Mart) have $18 billion each? Because savings can be passed on for generations. The idea that sales taxes are flat over time is a logical fallacy, a persons marginal savings rate increases with income there for virtually all sales taxes are regressive (caviar excluded, but that might be more of an excise tax). Even when food and other essentials are excluded from sales taxes (as in Florida and some other states) the very wealthy still end up saving a much larger proportion of their income, and will thus pay a much smaller proportion of their income in sales taxes. There may be theoretical instances where sales taxes could be progressive but in practice it never happens and the vast majority of sales taxes are regressive. —Preceding unsigned comment added by 68.157.52.240 (talk) 19:46, 9 September 2008 (UTC)

It's also notable inflation and productivity gains increase income over time, therefor the proportion of spending represented by old income shrinks over time, and so income spent early is a smaller percent of spending than income saved and spent later. John Moser (talk) 16:34, 29 August 2019 (UTC)

Flat taxes (assuming no exemptions, etc. that could complicate things) are proportional taxes, by definition. According to the Wikipedia article on Proportional tax, "A proportional tax is a tax imposed so that the tax rate is fixed as the amount subject to taxation increases." From Britannica, "A proportional tax is one that imposes the same relative burden on all taxpayers—i.e., where tax liability and income grow in equal proportion." A tax with a fixed rate (such as a sales tax) has a fixed tax rate, regardless of the amount subject to taxation. It is incorrect to say that a fixed-rate tax is regressive. —Preceding unsigned comment added by 71.201.189.205 (talk) 16:53, 4 May 2009 (UTC)

Regressive taxes are defined as being less of a proportion of the income of the entity paying the tax as the entity's income increases. Applying a flat-rate tax against something that's not an exactly-equal percent of each taxpayer's income gets you a progressive or regressive tax. John Moser (talk) 16:34, 29 August 2019 (UTC)

The "A tax with a cap, above which no taxes are paid. The United States payroll tax is an example of this." example is in reality an example of a progressive tax. While it is a cap tax it is by no means a regressive tax and is, in fact, a progressive tax in that those who pay in less receive higher returns than those who pay in more. Here's a link to an SSA authored paper that clearly spells that out: http://www.ssa.gov/OACT/NOTES/note2000s/note144.html. Since regressive and progressive taxes are in reality opposites how is it that a progressive tax got included as an example of a regressive tax in this Wiki article in the first place? — Preceding unsigned comment added by 158.147.44.35 (talk) 21:51, 24 April 2013 (UTC)

No. Federales (talk) 22:34, 24 April 2013 (UTC)

I think you may be confusing the tax, with the program / spending. The tax is regressive, but the spending could be described as progressive and overall, if you tie the revenue to the spending, the program could be described as ultimately progressive. I believe that debate is on the FICA article, but if you're just looking at the tax itself and disassociate it with the perceived allocation to a particular program (assume general revenue), then it is a regressive tax. Hope that helps. Morphh ^(talk) 19:54, 25 April 2013 (UTC)

When the terms "a regressive tax imposes a greater burden (relative to resources) on the poor than on the rich" and "Regressive taxes tend to reduce the tax incidence of people with higher ability to pay" are used and then applied to the Payroll Tax (Social Security) as an example it is disingenuous at a minimum and borderline dishonest. In reality, Social Security taxes provide less burden to the poor in the form of greater returns at the expense of higher earners. It also true that the Social Security tax incidence actually increases for the more wealthy in the form of partially funding the progressive nature of the program. The contention that the Social Security "tax" is regressive but the Social Security "program" is progressive is illogical. Even if technically the Social Security "tax" is regressive, I do not think it should be used here as an example without pointing out the fact that the Social Security program itself is progressive in nature. As it is currently stated the novice will leave the page believing our Social Security "program" is regressive when in reality the opposite is true. — Preceding unsigned comment added by Prasm (talk • contribs) 19:28, 29 April 2013 (UTC)

Guess that depends on if you live to collect and how long you live. This article is not about a government program. It is just trying to describe the structure of a tax, which is the collection of revenue. For the purposes of this article, we're just describing the fact that an income tax with a cap on it is regressive and the payroll tax is an example of that type of tax. We don't even mention social security. I did however include a short bit on spending, not sure it's wise and others can comment, but I figured I'd take a stab at it. Morphh ^(talk) 20:06, 29 April 2013 (UTC)

It doesn't; it's simply incorrect. The tax is simply regressive because it's applied against the poorest at a greater rate than those with a higher income. The program is also cited as progressive because it pays out a higher percent of income to the poorer worker, but the poorer worker still gets a smaller benefit in retirement, which raises all kinds of issues. Finally, the program taxes over your lifetime, and time-shifts the return: you pay in for 40 years or so with on benefit, while the wealthy have a large amount of untaxed money (above the cap) to invest and derive additional income (or to spend and derive standard-of-living). Social Security is really flow-through, and current revenues pay current benefits; this largely means, all together, that the poor and middle-class are paying for themselves, and the rich are exempt. John Moser (talk) 16:34, 29 August 2019 (UTC)

Current tax system in Poland is in fact regressive. 78.10.207.37 (talk) 11:03, 28 April 2023 (UTC)

Taiwan's income tax cited as regressive

Can there be more evidence provided?

" Individual Income Tax

A progressive individual income tax from 6% to 40% exists. Non-resident foreigners who stay in Taiwan for over 90 days must file tax returns. Foreign individuals resident in Taiwan for over 183 days are subject to taxation on all income from Taiwan sources but are not liable for taxes on income earned outside of Taiwan.

Personal exemptions of NT$72,000 are allowed for the taxpayer, spouse and all dependents. For parents or lineal ascendant of the taxpayer who is over 70 years, an additional exemption of NT$108,000 can be taken."

http://www.prctaxman.com.cn/taiwan.htm

fairness

It should mention most important argument for regressive tax, that it is most fair when everyone pays same amount of tax - everyone gets same amount of protection from government.

It can also be argued that a regressive tax can be fair in the respect that those on higher incomes are still paying more income tax than those on lower incomes, yet receive nothing more (and indeed, usually less for at, as Government spending often helps poorer individuals more). I.e. a person paying $100,000 in tax from $1,000,000 in income gets nothing more (generally) in services than someone paying $10,000 from $50,000. -Nichlemn 08:19, 9 December 2005 (UTC)

I think that it is a fundamental misunderstanding of society to say that the rich benefit the least from government while the poor benefit the most. In fact the rich may receive fewer welfare checks but they receive the bulk of the police protection, the benefit of sedated masses, access to government, goods and services, and so on. Most theories of society will recognize that if society were to dissolve it is the rich, not the poor, who would lose most, precisely because society benefits them the most. That concept, I think, underscores the principle behind a progressive tax. Obviously any attempt to perfectly correlate tax rate with fairness or duty is going to be impossible. The idea, however, is that it is quite fair for the rich to pay more taxes because the rich benefit the most from society. [MKS]

This contradicts data that I have seen. For example, most of the U.S. budget is social programs, which are primarily a distribution of wealth from the rich to the poor - Medicade, Medicare, Social Security. Many social programs are dependent on income with lower levels recieving larger benifits. Lower income are more likely to use public education while higher income more likely to go for private school. Do you have any sources for your claim? Morphh ^(talk) 11:56, 12 July 2007 (UTC)

The government keeps society from collapsing into anarchy (which would destroy the fortunes of the rich), and maintains a system of laws that largely favors the rich. And the distribution of wealth goes in exactly the opposite direction that you claim it does. 24.214.230.66 (talk) 06:27, 16 February 2011 (UTC)

The argument being made is effectively that the rich benefit from individuals not stealing. Those saying they get the benefit from the society is implying that if there was no law enforcement theft would essentially hit the rich. Those saying the protection is equal are saying that there is a social agreement not to steal regardless of whether the government enforces laws. Thus the benefit of keeping your goods is not bought by your taxes. It is effectively based on what you believe about human behavior in a society with no government. No one knows the answer because we have never really tried to fully remove government from a modern society to see what happens. Individuals will simply pick a side based on their personal convictions. 41.132.23.2 (talk) 08:56, 9 October 2013 (UTC)jb5855

npov

It is natural to expect that some of those individuals and organizations which benefit most directly(...)

I don't think it is npov. Can i write in progressive tax:

It is natural to expect that some of those individuals and organizations which benefit most directly and most tangibly from a progressive tax (namely poor individuals), will advocate such a tax regardless of the notion of equalness. Therefore it is suggested by detractors that progressive taxes are the darlings of the poor and of special interest groups. There are indeed numerous lobbies and political groups devoted to progressive taxes.

?

Agreed. It is somewhat hypocritical to claim that regressive taxes are "greedy", given than progressive taxes may be equally greedy, just by different people. -Nichlemn 08:16, 9 December 2005 (UTC)

The cornerstone of the "rationally" self interested economics community is that the poor are not actually disadvantaged or poor but are only labeled that way because they don't have as much money as everyone else, rather than they don't have enough money to cover the most basic costs of living. To call progressive taxes, a desire to remove regressive taxes or luxury taxes an expression of equitable greed, in regard to progressive taxes, is to employ a perspective with a very skewed definition of the word. A poor man struggles to put food on the table, while a wealthy man struggles to keep higher margins of expense versus income.

Buying a ferrari is not equatable to buying food or buying a tank a gas for a 1985 toyota tercel.

An intellectually honest economist knows the difference between greed and necessity by nature of understanding the simple concept of diminishing returns in regard to the relative value of money between those with money and those without money. [CWK]

claim that supply-side economics advocates regressive taxes

From Peter Johnson (00:28, 13 November 2005 (UTC)):

• The claim that supply-side economics advocates regressive taxes is not substantiated in the article, no references are provided, and according to my readings (such as of the late supply-side writer Jude Wanniski), supply-siders only ever advocated making marginal tax rates less progressive, rather than fighting for actually regressive tax brackets.

I'm not sure the advocacy section is fixable. I think it needs to be removed entirely unless someone can come up with at least one sourced instance of a proponent of supply-side economics advocating a regressive tax structure. Under Reagan, for example, the tax structure was not made regressive. It was made less progressive -- a crucial distinction. --Bziobnic 16:18, 15 November 2005 (UTC)

I agree with the two comments above - it's too contentious a claim to make without any supporting evidence. --Aviso 21:18, 27 January 2006 (UTC)

Ahhh

I just spend over an hour working on this article too lose all the dang changes... Ahhhh! I knew I should have saved in steps. Morphh ^(talk) 04:49, 8 December 2006 (UTC)

Well, I got a little bit done... Sorry to vent on the talk. :-) Getting some sleep. Zzzz Morphh ^(talk) 05:07, 8 December 2006 (UTC)

Ok - finished cleaning up the article, added some NPOV balance, and I removed the tag. We are now in need of some serious reference work to bring this article up to par. I added a citation needed tag to the talk page to focus attention on correcting this aspect. Morphh ^(talk) 23:02, 9 December 2006 (UTC)

Rearrangement on the Folsom argument

Dear editors: I have clarified the article to show that the critique by Dr. Burton Folsom about regressive taxation is indeed his own critique. I know of no other scholar who has ever made the argument that the 1894 income tax statute was declared unconstitutional in Pollock on the ground that the tax was progressive. The tax certainly may have been progressive -- but the decision (or rather, the decisions) in Pollock had absolutely nothing to do with that, as far as I can tell. Not only that, I believe the topic of progressivity is not even mentioned by the Court in the two Pollock decisions.

I therefore modified the article to show that the statement is actually a quote of Dr. Folsom, and I added clarifying language to the effect that the "progressivity" issue was not even mentioned by the Court. Yours, Famspear 19:25, 8 March 2007 (UTC)

Social Security Tax based on Income?

In the Advocacy section the article states that Social Security tax is tied to income when discussing the overall tax burden on individuals in the highest tax bracket. Social Security tax is capped after the earner reaches a certain level (For 2007 its $97,600, I think) that is well below the level at which the highest tax bracket kicks it. This section is misleading or wrong depending on your reading of it. —The preceding unsigned comment was added by 84.11.113.36 (talk) 09:15, 26 April 2007 (UTC).

I've tried to address this by reordering and rewording some things. Morphh ^(talk) 14:48, 26 April 2007 (UTC)

The statement does not say that it applies to all income of the highest tax bracket. The tax bracket is used as a reference on how much someone could pay in income taxes and then goes on to state other taxes. 35% Fed, ?% state, 15% FICA (employee and employeer)... Morphh ^(talk) 17:33, 26 April 2007 (UTC)

For 2007, the Social Security wage base appears to be $97,500 (not $97,600). Anyway, I have updated the article on this. Yours, Famspear 17:48, 26 April 2007 (UTC)

Added "see also"

The amount of progressivity and regressivity of a tax can be expressed by different metrics. One of them in widespread use is the Suits index. I've added the suits index to the "see also" section. Minnesota appears to make regular reports of the suits index for their tax system. Interested parties are invited to expand this new article.--Perkinsms 13:02, 18 May 2007 (UTC)

Where is the criticism?

All I can get out of this article is constant advocacy for regressive taxes or at least a slam on progressive ones. Where is the argument against regressive taxes and for progressive ones? Saying that progressive taxes "aren't what our founders wanted" is blatant propaganda for the point, considering there is an amendment on the subject. What our founders wanted, ostensibly, was democracy. That's what the amendment represents. To suggest that the results of this process ran afoul of the founders' desires is both meaningless and misleading.

Perhaps someone can add to this article some comments on social justice, arguments for progressive taxation based on social contract theory, or something similar.

Also of note: Regressive is the opposite of progressive taxation but there's also taxation that is neither progressive nor regressive. Why do most of the arguements look like they are anti-progressive tax arguements rather than pro-regressive tax arguements? ASG82 (talk) 20:31, 2 April 2008 (UTC)

Jefferson advocated that property taxes should increase geometrically as people are richer. He didn't envision income taxes and I disagree with property tax for a great many reasons (income tax was considered impossible to implement, too, until someone came up with payroll withholding). In any case, we can infer that a progressive income tax is not counter-indicated in preference for a regressive tax of any sort by Jefferson. John Moser (talk) 16:37, 29 August 2019 (UTC)

Why are Regressive Tax and Progressive tax not combined?

I don't get why Regressive tax and Progressive tax get separate pages.

Unless there is one page, which begins with definitions and metrics, both pages our not NPOV, IMHO.

There is also a paucity of citations. 70.22.67.251 (talk) 22:21, 12 February 2008 (UTC)

I guess it was thought that both have enough content on their own to justify it. A suggestion could be made to combine regressive, progressive, and proportional into one article. As far as NPOV, such content should be able to balance regardless of the article separation. We're likely to get into duplication of arguments though. We discussed it here at one point. I don't think I would object to a merge but I'd have to reread the articles and think about how they should be expanded. Morphh ^(talk) 14:14, 14 February 2008 (UTC)

Problem with the example

There is a problem with the Jane/John Doe example in the introduction. Although it talks about income throughout, the example doesn't actually specify either John or Jane's income. Instead it specifies their wealth. While it may be that the Jane with her higher wealth also has a higher income, we have no way of knowing from the description. It might just as likely be that John has a high income but spends it all whereas Jane has a low income but saves as much as possible. Thus Jane's relatively high wealth. In light of this it becomes apparent that the percentages quoted have just been plucked out of the air. -- Derek Ross | Talk 05:34, 14 February 2008 (UTC)

Excellent point. We'll have to look at correcting this. I see you made some changes and then reverted yourself. Feel free to correct the example and expand upon it with a wealth situation, particularly since income is surprisingly poorly correlated with expenditure. Annual income is not an especially accurate measure of one's ability to pay. Morphh ^(talk) 14:05, 14 February 2008 (UTC)

Clear definition

Here is the first line of this article. It seems poorly worded and confusing.

A regressive tax is a tax imposed so that the effective tax rate decreases as the amount to which the rate is applied increases. —Preceding unsigned comment added by 67.42.220.203 (talk) 21:12, 21 February 2008 (UTC)

We're working on a new definition, which is currently presented in the progressive tax article. I was waiting for any comments before applying it to this article. We're also considering a merger of the three articles, which would correct this as well. Morphh ^(talk) 21:30, 21 February 2008 (UTC)

I would prefer to keep the pages separate. I don't see any merge discussion though so I guess this idea is out? Cazort (talk) 23:33, 9 April 2009 (UTC)

Why I deleted the section on "Advocacy"

It was a bold move of me to entirely delete the section on advocacy. The reason is that the material there pertained exclusively to opponents of progressive taxation, which is not the same thing as advocacy on behalf of regressive taxation. If people can find sources that specifically discuss advocacy of regressive taxes and want to incorporate material into the page, please do so. I don't really know where to find such sources. Cazort (talk) 00:43, 7 February 2009 (UTC)

The changes look fine to me, though I did a bit more cutting (listed as IP as Wikipedia logged me out a minute before I submitted). I removed the U.S. listing as we've seen on other articles... it becomes a country listing and troll ground for criticism / advocacy. It's better to wrap it into the examples in some limited capacity to express the ideas. The particulars of a country's progressive or regressive tax system should be addressed on the tax articles specific to that country or the tax. So this article should just list sourced examples in a global context and not dive too deep into country specifics. Morphh ^(talk) 15:01, 07 February 2009 (UTC)

I agree with you. I think your idea of removing the U.S. section and focus and keeping it more general is probably a better approach. Cazort (talk) 19:24, 7 February 2009 (UTC)

Hmm... well, I don't like it how whenever someone adds a reason for either side, it gets deleted because it makes the article biased. Reminds me of the tale where a chair is cut into pieces to get the legs even. If you can't add balancing reasons to the other side, just tell someone else to, instead of deleting. 24.85.161.72 (talk) 00:55, 24 August 2012 (UTC)

Removed sentence

It is possible for a tax to be regressive but result in a progressive effect, and vice versa — as the poor tend to gamble more than the rich, a progressive tax on lotteries could be regressive in its effect; as the rich tend to own more debt instruments than the poor, a regressive tax could have progressive overall effects.

I'm just putting this here so it doesn't get lost, if someone wants to find the source. I know I've read material that supports the statement, but don't have time at the moment to hunt them down. American payroll taxes are argued to be a regressive tax but have an overall progressive effect. See FICA#Social_Security_regressivity_debate which provides two sources for this arguement from the Congressional Budget Office. Morphh ^(talk) 20:56, 10 April 2009 (UTC)

This is a terrible wikipedia entry. Rather than being a disinterested explanation of what a regressive tax is, and what it is not, it is an argument about how regressive taxes are bad for the poor and beneficial for the rich. The arguments in favour of this view, taint the entry by giving a political dimension to ought to be a economic explanation. This position, progressive good, regressive bad, by the way, is a glaring oversimplification. Of note, I look at the references and not one is from a serious academic resource. This is flippant treatment for such an important topic. Here's an idea, quote an online economics textbook, or tax journal, not a dictionary, and save the rich bashing and poor glorification for the election campaign. Ben 16:35, 24 April 2010.

Removed italicized text

I removed [1] the italics in the United States section, specifically the bit "criticized the U.S. tax code as highly regressive." I couldn't see any reason for it to be italicized, and if it the ''italic text'' markup was supposed to be quotation marks, it isn't in the cited source. Hopefully I can come back soon and see what I can do about all the missing citations and the somewhat awkward treatment of the subject here. Cheers, Archaeo (talk) 10:29, 19 September 2010 (UTC)

The last paragraph of the article states that the official US government opinion is that the US has a progressive tax system. However, the next section, ie Buffet, says it isn't in actual practice. Any "reliable" sources about who is truthful just to complete the circle. I came to this article because of a current issue in Vermont. We, our legislature, are contemplating a tax on sugar, which of course will eventually morph into a tax on all food. 12 other states tax food - VT is preparing to join the hardest nosed taxers of the poor it appears - so much for liberal VT.159.105.81.31 (talk) 18:33, 3 December 2010 (UTC)

Lottery

Lotteries are voluntary. Taxes are mandatory. A lottery is therefore not a type of tax. The sentence saying that, "A lottery is, in effect, a tax," should be changed. 130.91.66.233 (talk) 01:38, 29 March 2011 (UTC)

No one did anything about this. Lotteries clearly aren't taxes. So I'm removing the section that uses lotteries as an example. 72.94.233.61 (talk) 15:09, 13 July 2011 (UTC)

Progressivity of US Federal Tax System

The section

According to Congressional Budget Office estimates,[13] the federal tax system is a progressive tax system for earners all but the richest 1% of Americans. According to the study, the lowest earning 20% of Americans (24.1 million households earning an average of $15,900 in 2005) paid an effective federal tax rate of 3.9%, when taking into account income tax, social insurance tax, and excise tax. The highest earning 5% (5.8 million households earning an average of $520,200 in 2005) paid an effective federal tax rate of 21.5%. However, the highest earning 1% of Americans (1.1 million households earning an average of $1,558,500 in 2005) paid an "effective" federal tax rate of 21.3%.

is unsubstantiated or is pointing to the wrong reference. The Congressional Budget Office report shows an effective rate on all federal taxes to be 4.3% for the lowest quintile. The top 5% paid an effective rate of 28.9% while the top 1% paid a rate of 31.2%. Someone else please verify I'm not reading the reference source wrong. Thanks. — Preceding unsigned comment added by 24.222.210.165 (talk) 04:56, 10 February 2012 (UTC)

Do any of you gents know if these statistics are accounting for double-taxation? By wage, a consumer spends; revenue goes to wage; and the wage-earner is taxed, thus the consumer spending is taxed at that rate. By profit sharing (dividends), a consumer spends; revenue goes to profits; the profits are taxed; remaining revenue is sent to shareholders; and the shareholders are taxed at capital gains, thus the consumer spending is taxed at CIT, then the remainder is taxed at capital gains. Often we discuss shareholders as having their "income" taxed at only the capital gains rate, ignoring that profits taken by CIT are not available to pay dividends while profits directed to wages and bonuses are not taxed as CIT. Logically, the entire pass through business to the direct individual recipient of income must be considered as the tax cycle. John Moser (talk) 16:41, 29 August 2019 (UTC)

Another example of regressive US tax

Shouldn't the mortgage interest deduction be considered an example of regressive taxation? After all, it excludes renters, who are usually poorer than homeowners. — Preceding unsigned comment added by 218.102.187.133 (talk) 04:06, 11 July 2012 (UTC)

No - it doesn't exclude renters. The renter doesn't pay tax on the mortgage interest, so it would be a far stretch to suggest not paying tax is regressive. If you want examine the tax incidence, the owner pays tax, of which some interest is deductible. The base costs is then used to determine a market price for the rental property. So this deduction is already reflected in the cost to the renter. What the interest deduction creates is a economic distortion between the real estate market and other consumer markets, not between owners and renters. Generally taxes on property would fall into the proportional category. Morphh ^(talk) 15:14, 11 July 2012 (UTC)

This is why I included a new section in talk on property taxes. It can't go one way. Either the mortgage interest deduction is a regressive tax or property taxes are. If the mortgage interest deduction is taken out of rent, then property tax is added. This article, by the exclusion of both, fails to be complete. --Jdblick (talk) 15:50, 23 December 2018 (UTC)

I think the mortgage deduction is a good example of a regressive tax. It is kind of like preferential rates for dividends and capital gains. It is available to everyone, people who are in the 15% tax bracket or less don't have to pay a single penny of tax! So generous of the government except I highly double anyone making $15k/year is getting any dividends or capital gains. The more affluent homeowners are allowed to deduct interest where renters aren't. Furthermore, the IRC allows for a second home deduction as well. There is something inherently inequitable about allowing homeowners to deduct the interest from two homes whereas the renter isn't allowed to deduct even a fraction of rental expenses. — Preceding unsigned comment added by 70.199.227.245 (talk) 00:11, 28 November 2012 (UTC)

The mortgage interest deduction is not a tax. It's a subsidy. Therefore it is outside the scope of this article. Federales (talk) 02:24, 30 April 2013 (UTC)

Global

I'm thinking we should remove / relocate the entire U.S. section of this article to Progressivity in United States income tax. It doesn't belong in a general article about regressive taxation, except as perhaps specific examples in the Example section. Morphh ^(talk) 16:11, 7 February 2013 (UTC)

Until this page might be moved toProgressivity in United States income tax, Can I remove the sentence in the first paragraph that says: lower income earners are more affected by the regressive tax.?? the specific part says:, ...a regressive tax imposes a greater burden (relative to resources) on the poor than on the rich —... — Preceding unsigned comment added by 66.81.29.220 (talk) 03:36, 30 March 2013 (UTC)

Why, that statement is not specific to the U.S. so it would seem appropriate here. The page is not moving, just the section that was specific to the United States, which is listed Talk:Progressivity_in_United_States_income_tax#United_States here. Morphh ^(talk) 15:13, 30 March 2013 (UTC)

Inconsistent Definitions

I read this article and found it confusing. I can see that the main definition is heavily referenced, and is most likely correct (a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases).

However some of the examples don't match up with that definition, but do with the popular definition. The popular definition is given offhand in the Eco Tax page: a tax with an average tax rate that decreases as the taxpayer's income increases

For example, when purchasing tobacco the "amount subject to taxation" is the purchase price of the tobacco product. As an individual purchases more tobacco, the tax rate on that tobacco remains the same. The argument that tobacco tax is regressive talks about the purchasers income.. but that has nothing to do with whether or not the tax is regressive. From the definition given in this article. A person's income only affects whether a tax is regressive or not in the case of an income tax.

I'm not going to edit the article as it's not my domain.. but this needs to be clarified. Maybe specify in the first paragraph that, whilst the technical definition is about tax rate vs. amount under tax, there is a casual use of "regressive tax" that means "any tax that is paid by poor people more than it is by the rich". Trideceth12 (talk) 04:21, 3 March 2014 (UTC)

@Trideceth12: The lead sentence describes the primary economic definition of a regressive tax, which describes the rate structure. That definition applies to the tax base, but what you're describing is often referred to as a regressive effect of the tax policy, which is described a bit in the second paragraph and directly in the third paragraph of the lead. It's not an adjustment of the tax rate, but application of the tax base. The opposite would be a luxury tax, which is often considered progressive. In both cases, the tax rate itself would be a proportional tax if applied broadly, but the demographics of the tax base can create a progressive or regressive effect. The effect of a regressive tax is to place a higher tax burden relative to resources onto those with a lower ability-to-pay, which is what is described with tabacco for example. In these cases, the term is being used to described where the tax incidence falls, rather than the rate structure itself. So, the tax could accurately be described both ways depending on if you're referring to the structure or the tax as a whole. Hope that helps explain the inconsistency and I'll try to look at the examples and see where we can clarify the wording. Morphh ^(talk) 16:11, 3 March 2014 (UTC)

Undisputed vs Disputed

The sections titled disputed and undisputed are arbitrary, without explanation, and therefore reduce the neutrality of this article. A discussion on why certain forms are disputed and certain forms are not is in order, as well as arguments from both sides, as long as the examples are classified in this schema. — Preceding unsigned comment added by 96.38.105.21 (talk) 04:43, 13 August 2014 (UTC)

Good point, there shouldn't be such a distinction unless it's supported by sources. Darx9url (talk) 14:06, 3 October 2014 (UTC)

Assessment comment

The comment(s) below were originally left at Talk:Regressive tax/Comments, and are posted here for posterity. Following several discussions in past years, these subpages are now deprecated. The comments may be irrelevant or outdated; if so, please feel free to remove this section.

==WP Tax Class== Start class, but the article should be at least a B class article because the references are there or are derivative from other articles. Perhaps the references in the other articles should also be brought into the article. Some graphs would also be helpful.EECavazos 21:44, 11 November 2007 (UTC) ==WP Tax Priority== High priority because this article covers the basic contours of taxation. This article may also have traffic with many people looking up this concept on wikipedia.EECavazos 21:45, 11 November 2007 (UTC)

Last edited at 21:45, 11 November 2007 (UTC). Substituted at 04:06, 30 April 2016 (UTC)

USA

- higher proportion of contribution gets more rights in government.

- flat rates are better. equal rights.

ASG

223.225.144.218 (talk) 18:17, 23 November 2016 (UTC)

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Property taxes

Why are property taxes not included in the article. Renters pay property taxes in their rent. Jdblick (talk) 15:50, 23 December 2018 (UTC)

Misleading statement in summary

"These taxes tend to reduce the tax burden of the people with a higher ability to pay, as they shift the relative burden increasingly to those with a lower ability to pay." A tax cannot "reduce" or "shift". Only a change in tax can do that. Could someone please correct this? — Preceding unsigned comment added by 2A00:23C5:2A92:6F00:B049:E0B0:5C53:DEA (talk) 14:24, 29 May 2019 (UTC)