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by eropple 2667 days ago
That is a poor definition of a regressive tax. A better definition is "a tax that ignores the marginal utility of income in its application".

Poor people derive overwhelmingly more value from dollar $10,001 than rich folks do from dollar $1,000,001. (This is not controversial.) Thus, rich folks can--and should because they derive more value from the structures of the society that enables them to be successful and not hit over the head for their paycheck--pay progressively more to sustain that society. (This is also not controversial in reality, even amongst relatively right-wing economists.)

2 comments

The marginal utility of income is not measurable, whereas the percentage of income that gets paid as tax is. That's why "regressive" and "progressive" taxation is defined in terms of the measurable thing, not the unmeasurable thing. What you're saying is simply that a progressive tax system is better because it attempts to take into account the marginal utility of income.

And then everyone starts arguing about how progressive the system should be to do that properly. :-)

The definition I gave is, nonetheless, the accepted definition of the term. Can't find a citation for yours.

(Note: I do understand about utility, and how/why progressive tax systems help society. My only bone of contention here is that you're trying to redefine a specific term to have a different meaning.)

"While a flat tax imposes the same tax percentage on all individuals regardless of income, many see it as a regressive tax. A regressive tax is on which taxes high-income earners at a lower percentage of their income and low-wage earners at a higher rate of their income. The tax is seen as regressive due to a more significant portion of the total funds available to the low-income earner going to the tax expenditure. While the upper-income payer still pays the same percentage, they have enough income to offset this tax load."

https://www.investopedia.com/terms/f/flattax.asp