The Key Difference Between Regressive vs Progressive Tax

regressive tax vs progressive tax
Feature	Regressive Tax	Progressive Tax
Definition	A tax that takes a larger percentage of income from low-income earners than from high-income earners.	A tax that takes a larger percentage of income as income increases.
Burden Distribution	Heavier burden on the poor.	Heavier burden on the rich.
Tax Rate Structure	Flat or decreasing rate as income rises.	Increasing rate with higher income brackets.
Example Taxes	Sales tax, excise tax, VAT.	Income tax with tax slabs, estate tax.
Equity	Considered less equitable or fair.	Considered more equitable or fair.
Incentive Effects	Can discourage consumption among low earners.	May discourage earning more due to higher rates.
Revenue Stability	Stable revenue from all income levels.	Revenue depends more on high earners.
Impact on Inequality	May increase income inequality.	Can help reduce income inequality.
Ease of Implementation	Simple to administer and collect.	More complex due to multiple tax brackets.