“A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases”
The amount subject to taxation on sales tax is the amount spent, not one’s income.
I know that it is commonly accepted that sales tax is regressive, but strictly speaking, that interpretation mixes the amount subject to taxation by one measure (sales) with the amount subject to taxation by another measure (income).
By the strict definition the common interpretation is not correct.
[quote=CONCHO]Sales tax is not regressive. The tax does not decrease as the amount subject to tax increases.
FAIL. Sales tax is regressive because as the ratio of income to purchases increases, the proportion taxed decreases. Think of it this way, a person making $200K/year uses the same amount of laundry detergent as a person making $50K/year, yet the person making $50K will pay a higher percentage of their income in tax purchasing that item.
