In terms of effective tax rates, the sales tax can be viewed as a regressive tax.

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The sales tax is considered regressive because it has a greater impact on low-income individuals compared to high-income individuals. This is because low-income individuals spend a larger portion of their income on goods subject to the sales tax, whereas high-income individuals have a larger portion of their income available for savings or consumption of items not subject to the sales tax. Therefore, the effective tax rate (tax paid as a percent of income) is higher for low-income individuals, making the sales tax regressive.

In Terms of Effective Tax Rates, the Sales Tax Can