Simply paste in the code from the box below to publish it to your site.The taxes you pay on your income and purchases can take several forms, including progressive tax, regressive tax, and flat taxes. Share this infographic on your website or blog. Exemptions on basic necessities, such as groceries and medication, makes sales tax less regressive.Washington, Florida, and Texas have the most regressive tax systems among all states.The top 1% of earners pay just 5.4% of their salary in sales tax, while the lowest bracket pays 10.9%.(Hint: avoid Washington and Florida!) Facts to Tweet This sales tax infographic also explains the burden that sales tax carries, and which states are the most regressive. Mary spends 2% of her earnings on sales tax, while Julie spends only 0.4% of her earnings. If you compare Mary and Julie in the example below, you’ll see that sales tax has a much larger negative effect on Mary than it does on Julie. We’ve made an infographic below to help you understand what a regressive tax is. It’s the same percentage of earnings.įor a more in-depth look, see our post Is Sales Tax Fair?, published in 2016. Note that this is the same percentage of what they spend – which is exactly how sales tax works. That’s where everyone pays the same percentage of what they earn. There is – it’s called a “proportional tax”. You may wonder if there’s a middle ground. Income tax is called a “progressive tax”, because the burden falls more strongly on those who earn more. Because everyone in a given area pays the same percentage of tax, it works out to be a larger portion of the overall income for people who earn less.Ĭompare that to income tax, where (not counting deductions), the rich pay a higher percentage than the poor. In fact, based on percentage of salary, people in the lowest bracket pay more than DOUBLE what the top 1% pay. Why? Because people who earn less pay a larger percentage of their salary in the form of sales tax, as compared to those who earn more. You may be wondering: is sales tax progressive or regressive? It refers to a tax that is unfairly imposed more strongly on lower income families. Have you ever heard the term “regressive tax”? Maybe not.
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