Degressive Tax - Explained
What is a Degressive Tax?
Written by J. Mance Gordon
Updated at April 17th, 2024
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What is a Degressive Tax?
Any tax where the rate of the tax decreases as the amount subject to taxation increase.
How Does a Degressive Tax Work?
This kind of tax puts more burden on the poor and relieves the rich. The rate of tax is disproportionate to the ability of payment of taxpayers. It is a regressive tax system as, the more someone consumes or earns, the less pay they for it. The people with higher income and consumption pay less tax than the people with less income and consumption.