What Does Regressive Tax Mean?
A tax that takes a larger percentage from low-income people than from high-income people. A regressive tax is generally a tax that is applied uniformly. This means that it hits lower-income individuals harder.
“This toll increase does hurt poor people disproportionately.”
Okay, but it’s not a question of “hurt.” Like I said, the income tax hurts people more lower down the scale, even though it’s progressive. That’s because everything hurts rich people less moneywise, since they have less money.
“regressive tax is generally a tax that is applied uniformly”
No it’s not. Or if it is, that’s only because we’ve gotten so used to progressive taxation that we take it as normal and any reversion to fair taxes as a step backwards (and hence “regressive”). According to the conventional definition, though, regressive taxes are ones for which there is an inverse relationship between the rate and ability to pay relative to resources. The relativity of resources is the important part.
Poorer people will pay more of the tax, since there are more of them. And it will be harder on them to pay, since they have less total money. But that doesn’t make it regressive. What would do so is not the burden being large reltive to their total income. It would be the burden falling on them disproportionately after you’ve controlled for income volume. As in sin taxes, for instance, which are regressive because rich people don’t as much buy that stuff.
What you have with bridge tolls is more of a burden on lower incomes than the income tax, for instance. But since it is (ignoring special passes not based on wealth) applied uniformly, it is neither. It is a flat tax, or what they call a “proportional” tax.
“tax that takes a larger percentage from low-income people than from high-income people”
People often pretend like this is the case, but it’s not so much. Taxes are not regressive simply if poor people pay more of them than others. They are so if they fall more heavily, relative to income, on people with lower incomes. Poor people paying a larger percentage of the total revenues does not necessarily (though of course it could, just not by itself) constitute this.
It is definitely true of sin taxes that they fall more heavily on poor people relative to income. I doubt it for bridge tolls, especially considering the relationship between car ownership and income.