Regressive Tax | Degressive Tax | |
1 | Regressive tax is one in which the rate of taxation decreases as the taxpayer's income increases. | A tax is called Degressive when the rate of progression in taxation does not increase in the same proportion as the income increases. |
2 | A regressive tax takes a smaller percentage of people's income the larger their income is. In this system, the rate of tax falls with increase in income. | In this case, the rate of tax increases up to certain limit, after that a uniform rate is charged and become constant. |