Because there is an inverse relationship between the tax rate and the taxpayer's ability to pay as determined by assets, consumption, or income, regressive taxes place a greater burden (relative to resources) on the poor than on the rich in terms of individual income and wealth.
The French Declaration of the Rights of Man and of the Citizen of 1789 proclaims: A common contribution is essential for the maintenance of the public forces and for the cost of administration.
According to critics, low-wage workers are disproportionately affected as they wind up paying a larger percentage of their income in taxes.
The fact that flat taxes have the potential to worsen income inequality is one of their main objections.
Some nations that use proportional taxation to remedy this problem do so by introducing deductions and exemptions for low-income people, thereby making the system less regressive.
[15] Conventional or retail sales taxes are only charged to the end user of a good or service.
The sales tax rate is applied to both goods and services; the buyer's income is not taken into consideration.
Most countries in the world have sales taxes at all or several of the national, state, county, or city government levels.
In many locations, "necessary" items such as non-prepared food, clothing, or prescription drugs are exempt from sales tax to alleviate the burden on the poor.
[18] Some jurisdictions class business and occupation taxes according to sectors, such as wholesaling, services, retailing, or manufacturing.
Thats why property taxes are often considered regressive - they take a larger percentage of income from low-income earners.
These taxes were collected in the form of crops and livestock, which served as essential resources for feeding the army and funding public infrastructure projects1.