Home > Economics FAQs Blogs > Is there a term to describe the opposite effect of something being regressive on low income families?
This question pertains to topics in Microeconomics, such as Progressive and Regressive Taxation, Income Inequality, Redistribution of Wealth
Regressive: A regressive tax system is one where the tax as a percentage of income decreases as income increases. It is often criticised for placing a disproportionate burden on low-income families.
Progressive: The opposite of a regressive effect is a progressive effect. A progressive tax system is one where the tax as a percentage of income increases as income increases. It is often viewed as a way to redistribute wealth and reduce income inequality.
In a progressive system, those who earn more income pay a larger percentage of their income in taxes, which can help reduce income inequality by shifting wealth from higher-income to lower-income families. Progressive taxes are designed to lessen the tax burden of people with a lower ability to pay, as they shift the burden increasingly to those with a higher ability to pay.
Income tax in the UK: The UK's income tax system is an example of a progressive tax. As of 2021, the basic rate of 20% applies to income up to £37,500. The higher rate of 40% applies to income over £37,500, and the additional rate of 45% applies to income over £150,000.
The US Federal Income Tax: The United States also has a progressive federal income tax structure, with rates ranging from 10% to 37% as of 2021.
The term to describe the opposite effect of something being regressive on low-income families is "progressive". Progressive policies or taxes are those in which the burden as a percentage of income increases as income increases, reducing the relative burden on low-income families and potentially helping to alleviate income inequality. Examples of progressive systems include the UK and US income tax systems.
