{"id":4570,"date":"2017-03-16T08:53:28","date_gmt":"2017-03-16T13:53:28","guid":{"rendered":"https:\/\/www.accuratetax.com\/?p=4570"},"modified":"2023-01-27T17:11:25","modified_gmt":"2023-01-27T17:11:25","slug":"regressive-sales-tax-infographic","status":"publish","type":"post","link":"https:\/\/www.accuratetax.com\/blog\/regressive-sales-tax-infographic\/","title":{"rendered":"Why is Sales Tax Considered a Regressive Tax? [Infographic]"},"content":{"rendered":"\n

Have you ever heard the term “regressive tax”<\/strong>? Maybe not. It refers to a tax that is unfairly imposed more strongly on lower income families. <\/p>\n\n\n\n

Is Sales Tax Regressive?<\/h2>\n\n\n\n

You may be wondering: is sales tax progressive or regressive?<\/p>\n\n\n\n

Sales tax is regressive, in fact. 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.<\/p>\n\n\n\n

In fact, based on percentage of salary, people in the lowest bracket pay more than DOUBLE<\/a> what the top 1% pay. 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.<\/p>\n\n\n\n

Compare that to income tax, where (not counting deductions), the rich pay a higher percentage than the poor. Income tax is called a “progressive tax”, because the burden falls more strongly on those who earn more.<\/p>\n\n\n\n

You may wonder if there’s a middle ground. There is – it’s called a “proportional tax”. That’s where everyone pays the same percentage of what they earn. In other words, a flat tax. Note that this is the same percentage of what they spend<\/em> – which is exactly how sales tax works. It’s the same percentage of earnings<\/em>.<\/p>\n\n\n\n

For a more in-depth look, see our post Is Sales Tax Fair?<\/a>, published in 2016. It still applies today.<\/p>\n\n\n\n

Regressive Taxes Examples<\/h2>\n\n\n\n

We’ve made an infographic below to help you understand what a regressive tax is. 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. Mary spends 2% of her earnings on sales tax, while Julie spends only 0.4% of her earnings. This sales tax infographic also explains the burden that sales tax carries, and which states are the most regressive. (Hint: avoid Washington and Florida!)<\/p>\n\n\n\n

\"sales<\/figure>\n\n\n\n

Facts to Tweet<\/h3>\n\n\n\n
    \n
  1. The top 1% of earners pay just 5.4% of their salary in sales tax, while the lowest bracket pays 10.9%. [tweet this<\/a>]<\/li>\n\n\n\n
  2. Washington, Florida, and Texas have the most regressive tax systems among all states. [tweet this<\/a>]<\/li>\n\n\n\n
  3. Exemptions on basic necessities, such as groceries and medication, makes sales tax less regressive. [tweet this<\/a>]<\/li>\n<\/ol>\n\n\n\n

    Embed This Infographic<\/h3>\n\n\n\n

    Share this infographic on your website or blog. Simply paste in the code from the box below to publish it to your site.<\/p>\n\n\n\n