Is the Sales Tax Regressive or Progressive?
As the chart below demonstrates, the general sales tax is very regressive – that is, poor and middle class people pay a much higher percentage of their income towards it than wealthy people do. The chart below shows that those at the 80th percentile of income and above contribute less than half as much to the sales tax, as a percentage of their income, than the lowest income earners in the state. Similarly, those earning between $34,000 and $58,000 contribute twice as much to the sales tax, again as a percentage of their income, as do income earners in the top 5 percent. An increase in the sales tax would therefore hit low and middle-income people harder than high-income people.
