Regressive taxation has long been a political issue but is rooted squarely in mathematics rather than political platforms. The opposite of regressive taxation is progressive taxation. The basic difference between the two lies in the way in which the two types of taxation affect individuals in different income levels. The regressive tax places a heavier tax burden on the poor while the progressive tax places higher taxes on the rich. An example of a regressive tax is sales tax while an example of a progressive tax is income tax. With progressive taxation, the more money an individual makes, the more taxes that individual incurs. With regressive taxation, the less money an individual makes the more taxes they incur.

Regressive Tax in Action

The way in which regressive taxes, such as sales taxes, disproportionately effect the poor can be seen by using the example of a high-income individual buying a motorcycle versus a low-income individual buying a motorcycle. In this example, the low-income individual will earn $20,000 per year while the high-income individual will earn $500,000 per year. If the low-income individual buys a $10,000 motorcycle at five percent sales tax, they will pay $500 in sales taxes. This $500 is 2.5 percent of the low-income individual’s total income. If the high-income individual purchases a motorcycle that costs $40,000 at the same sales tax of five percent, they will pay $2,000 in sales tax. While the actual amount of sales tax paid by the high-income individual ($2,000) is more than the sales tax paid by the low-income individual ($500), the percentage of the overall income that these sales taxes represents in terms of the person’s total income is drastically disproportionate. The sales tax paid by the high-income individual is .4 percent of their total income compared to the sales tax paid by the low-income individual which is 2.5 percent of their total income. The high-income individual is hardly fazed by sales tax while it affects the financial status of the low-income person to a greater degree. This is why the issue of regressive taxation is such a political divider as certain politicians favor the rich while others represent the poor.