A tax that takes a smaller percentage of the income of wealthier individuals compared to poorer individuals is known as a regressive tax. An example of this is a sales tax, where everyone pays the same rate on purchases, but it disproportionately affects lower-income individuals who spend a larger portion of their income on goods and services. Consequently, as income increases, the relative burden of the tax decreases, making it less equitable for lower-income earners.
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