# Regressive Tax

*Taxes — Finicade finance glossary*

A regressive tax takes a larger share of income from lower earners, even when everyone pays the same rate. Sales tax is the classic case: people on low incomes spend nearly all of what they earn, so nearly all of it is exposed. Payroll taxes with an earnings cap are regressive at the top for the same structural reason. Exempting food and essentials is the usual partial remedy.

**Also known as:** regressive taxation

**Related terms:** [Progressive Tax](https://finicade.com/glossary/progressive-tax), [Sales Tax](https://finicade.com/glossary/sales-tax), [Value Added Tax (VAT)](https://finicade.com/glossary/value-added-tax), [Payroll Tax](https://finicade.com/glossary/payroll-tax), [Excise Tax](https://finicade.com/glossary/excise-tax)

Source: https://finicade.com/glossary/regressive-tax