Assume that you pay $10,000 of tax on a taxable income of $50,000.If your taxable income were $150,000,your tax payment would be $25,000.This tax structure is:

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The tax structure is regressive because the tax rate decreases as income increases. In this case, the tax rate decreases from 0.2 at $50,000 income to 0.167 at $150,000 income. This means that individuals with lower incomes are paying a higher percentage of their income in taxes compared to those with higher incomes.

Assume That You Pay $10,000 of Tax on a Taxable