Business Glossary

tax whose burden is applied equally to the poor and to the wealthy. Contrast with progressive tax , regressive taxation .

Example: ad valorem taxation on houses would be considered proportional taxation provided house values represent taxpayer wealth. However, because the poor tend to spend a disproportionately higher amount on housing, the ad valorem tax tends to be somewhat regressive, placing a relatively heavier burden on the poor.

tax whose burden is applied at the same rate to the poor as to the wealthy. Contrast progressive tax , regressive tax .