Definition

1. Noun:
   • A tax in which the rate decreases as the amount subject to taxation increases: A "degressive tax" is a type of tax structure where the tax rate applied to income or wealth declines as the taxable amount rises. It is the opposite of a progressive tax.

Usage

• The term "degressive tax" is used in economics, public finance, and policy discussions to describe a specific, less common tax structure. It is typically used in formal or academic contexts when comparing different tax systems (progressive, proportional, and degressive).

Examples

• Noun:
  • Some argue that a flat tax can become a degressive tax for very high earners if it includes a large standard deduction.
  • The proposed levy was criticized as a degressive tax because it placed a proportionally higher burden on low-income households.

Advanced Usage

• "Degressivity": The quality or state of being degressive, often used to describe the characteristic of a tax system.
  • The report highlighted the degressivity of the national sales tax structure.

Variants and Related Words

• Degressive (adj): Decreasing in rate as the base amount increases.
  • The degressive nature of the fee schedule was controversial.
• Progressive tax (n): A tax where the rate increases as the taxable amount increases. (Antonym concept)
• Regressive tax (n): A tax that takes a larger percentage of income from low-income earners than from high-income earners. (Often used in a similar critical context, though technically distinct; a degressive tax is a specific type of regressive structure.)

Synonyms

• Regressive levy: A tax that imposes a heavier relative burden on those with lower ability to pay. (Note: "regressive" is a broader, more commonly used critical term in public discourse.)
• Inversely progressive tax: A less common synonym emphasizing the opposite structure of a progressive tax.

Related Phrases

• Tax incidence: The analysis of who ultimately bears the economic burden of a tax, often discussed in relation to degressive structures.
  • The tax incidence of a degressive tax typically falls more heavily on lower-income groups.

Noun

1. any tax in which the rate decreases as the amount subject to taxation increases