regressiivisyyden

Regressiivisyys, often translated as regressivity, describes a situation where the proportion of income paid in taxes or charges decreases as income increases. This means that lower-income individuals or groups bear a proportionally larger burden than higher-income individuals or groups. In taxation, a regressive tax takes a larger percentage of a poor person's income than a rich person's income. Conversely, a progressive tax takes a larger percentage from a rich person, and a proportional tax takes the same percentage from everyone.

Examples of regressive systems include sales taxes on essential goods, certain user fees, and some types of flat taxes where exemptions are not sufficiently generous. When the tax rate is constant but the tax base is such that lower earners spend a larger proportion of their income on it, the effect is regressive. For instance, a flat tax on consumption is regressive because poorer individuals tend to spend a higher percentage of their income on basic necessities than wealthier individuals, who can save or invest a larger portion.

The concept of regressivity is important in economic policy and social welfare discussions, as it can exacerbate income inequality. Policies are often designed to mitigate regressive effects, such as through progressive income tax brackets, targeted subsidies, or the exemption of essential goods from sales taxes. Understanding regressivity helps in evaluating the fairness and distributional impact of various economic policies and charges.