{"id":73144,"date":"2022-07-31T18:49:00","date_gmt":"2022-07-31T22:49:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=73144"},"modified":"2022-08-08T14:17:12","modified_gmt":"2022-08-08T18:17:12","slug":"regressive-taxation","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/regressive-taxation\/","title":{"rendered":"How Regressive Taxation Contributes to Inequality"},"content":{"rendered":"\n

How does regressive taxation contribute to economic inequality<\/a>? Why do the rich pay less than their fair share of taxes?<\/p>\n\n\n\n

Regressive taxation is why America lacks funding for social initiatives and is riddled with economic inequality. The wealthiest people and corporations can avoid paying their fair share of taxes, so the bulk of public funds is pulled from the pockets of modest families.<\/p>\n\n\n\n

Keep reading to learn about the origins of regressive taxation and how it contributes to economic inequality. <\/p>\n\n\n\n\n\n\n\n

The Origin of Regressive Taxation<\/h2>\n\n\n\n

Regressive taxation became dominant in America because of the <\/strong>three-fifths compromise<\/em><\/strong>\u2014a ploy by the South to preserve slavery<\/strong>. The compromise allowed Southern states to count three-fifths of their enslaved populations as \u201cpeople\u201d in the House of Representatives\u2014this arbitrarily inflated their populations while denying citizenship and voting rights to enslaved people. Their high population counts then granted them political leverage over the North, allowing them to veto national policy and preserve slavery.<\/p>\n\n\n\n

However, when the country started to implement taxation, the three-fifths compromise<\/a> implied that Southern states would pay more taxes because of their higher populations. So to avoid a higher tax rate, Southerners pushed for imports<\/em> to be taxed instead of people<\/em>\u2014meaning consumers would ultimately pay higher prices to cover the tax on the imports they purchased. This began the long-standing tradition of American taxation being hidden in consumerism and the wealthy being able to avoid paying their fair share\u2014<\/strong>the root of American regressive taxation. <\/p>\n\n\n\n

The Uniformity Clause<\/strong>

Historians agree that heavy consumer taxes are a result of the three-fifths compromise and the South\u2019s efforts to maintain slavery while avoiding higher taxation; however, they add that the \u201cuniformity clause<\/a>\u201d of the Constitution was the key that allowed the South to maintain both slavery and moderate taxation. 

The uniformity clause stated that \u201call duties, imposts, and excises shall be uniform throughout the United States,\u201d meaning that no tax could be imposed that would impact a certain geographical region more than the rest of the country. For example, without this protection, the North could impose a tax on slaves that would disproportionately impact the South. This would allow them to ultimately tax slavery out of existence, and the South knew this. So by establishing the uniformity clause, the South avoided paying higher taxes while also protecting the institution of slavery against targeted tax attacks from the North.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

The Impacts of Regressive Taxation Today<\/h3>\n\n\n\n

Regressive taxation in America allows large wealthy corporations like Amazon and Netflix to avoid paying taxes and results in economic inequality and poor social initiatives like a lack of funding for public schools and healthcare<\/strong>. <\/p>\n\n\n\n

The authors continue to explain that progressive taxation<\/a> and higher income tax for the wealthy would dissolve some of the maladies America faces.<\/strong> This would provide the nation with more funding to spend on public programs that would help low-income families gain opportunities and resources, ultimately minimizing economic inequality.<\/p>\n\n\n\n

Is American Taxation Regressive or Progressive?<\/strong>

The 1619 Project claims that American taxation is regressive, meaning that low-income earners pay more of their income on taxes than high-income earners. However, this claim is currently being heavily debated. Officially, the US Tax Foundation claims that the American Tax Code is progressive<\/a>, but economists argue otherwise.<\/a>

In The Triumph of Injustice<\/em><\/a>, economists Emmanuel Saez and Gabriel Zucman argue that, including state and local taxes, the US tax code asks average American families (poor to moderately wealthy) to pay roughly 25 to 30%<\/em> of their income in taxes. However, the ultra-wealthy (the top tenth of the wealthiest 1%) pay just over 20%<\/em>. And, this group holds roughly the same wealth as the bottom 90%<\/em> of Americans combined. <\/em>

So overall, \u201caverage\u201d Americans are paying a much higher percentage of their income than the ultra-wealthy. And, like the authors of The 1619 Project<\/em>, Saez and Zucman argue that the bulk of public funds from taxes come from regular families while a large portion of American wealth remains in the pockets of the ultra-wealthy. Saez and Zucman conclude that this is largely why America faces such extreme economic inequality and a lack of initiatives for the common good (like healthcare for all) that other capitalist nations have.<\/td><\/tr><\/tbody><\/table><\/figure>\n","protected":false},"excerpt":{"rendered":"

How does regressive taxation contribute to economic inequality? Why do the rich pay less than their fair share of taxes? Regressive taxation is why America lacks funding for social initiatives and is riddled with economic inequality. The wealthiest people and corporations can avoid paying their fair share of taxes, so the bulk of public funds is pulled from the pockets of modest families. Keep reading to learn about the origins of regressive taxation and how it contributes to economic inequality.<\/p>\n","protected":false},"author":7,"featured_media":11211,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[81,24],"tags":[688],"class_list":["post-73144","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics","category-society","tag-the-1619-project","","tg-column-two"],"yoast_head":"\nHow Regressive Taxation Contributes to Inequality - Shortform Books<\/title>\n<meta name=\"description\" content=\"Regressive taxation is the reason America is riddled with wealth inequality. Learn about the origins and effects of regressive taxation.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.shortform.com\/blog\/regressive-taxation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How Regressive Taxation Contributes to Inequality\" \/>\n<meta property=\"og:description\" content=\"Regressive taxation is the reason America is riddled with wealth inequality. Learn about the origins and effects of regressive taxation.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.shortform.com\/blog\/regressive-taxation\/\" \/>\n<meta property=\"og:site_name\" content=\"Shortform Books\" \/>\n<meta property=\"article:published_time\" content=\"2022-07-31T22:49:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-08-08T18:17:12+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/s3.amazonaws.com\/wordpress.shortform.com\/blog\/wp-content\/uploads\/2020\/07\/decrease-income-taxes-rich-dad-poor-dad-scaled.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2560\" \/>\n\t<meta property=\"og:image:height\" content=\"1707\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Darya Sinusoid\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Darya Sinusoid\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.shortform.com\/blog\/regressive-taxation\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/regressive-taxation\/\"},\"author\":{\"name\":\"Darya Sinusoid\",\"@id\":\"https:\/\/www.shortform.com\/blog\/#\/schema\/person\/0421cce75bc249b11e2517b3a91f9c46\"},\"headline\":\"How Regressive Taxation Contributes to Inequality\",\"datePublished\":\"2022-07-31T22:49:00+00:00\",\"dateModified\":\"2022-08-08T18:17:12+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/regressive-taxation\/\"},\"wordCount\":698,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/regressive-taxation\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2020\/07\/decrease-income-taxes-rich-dad-poor-dad-scaled.jpg\",\"keywords\":[\"The 1619 Project\"],\"articleSection\":[\"Economics\",\"Society\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.shortform.com\/blog\/regressive-taxation\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.shortform.com\/blog\/regressive-taxation\/\",\"url\":\"https:\/\/www.shortform.com\/blog\/regressive-taxation\/\",\"name\":\"How Regressive Taxation Contributes to Inequality - Shortform Books\",\"isPartOf\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/regressive-taxation\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/regressive-taxation\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2020\/07\/decrease-income-taxes-rich-dad-poor-dad-scaled.jpg\",\"datePublished\":\"2022-07-31T22:49:00+00:00\",\"dateModified\":\"2022-08-08T18:17:12+00:00\",\"description\":\"Regressive taxation is the reason America is riddled with wealth inequality. Learn about the origins and effects of regressive taxation.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/regressive-taxation\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.shortform.com\/blog\/regressive-taxation\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.shortform.com\/blog\/regressive-taxation\/#primaryimage\",\"url\":\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2020\/07\/decrease-income-taxes-rich-dad-poor-dad-scaled.jpg\",\"contentUrl\":\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2020\/07\/decrease-income-taxes-rich-dad-poor-dad-scaled.jpg\",\"width\":2560,\"height\":1707},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.shortform.com\/blog\/regressive-taxation\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.shortform.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"How Regressive Taxation Contributes to Inequality\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.shortform.com\/blog\/#website\",\"url\":\"https:\/\/www.shortform.com\/blog\/\",\"name\":\"Shortform Books\",\"description\":\"The World's Best Book Summaries\",\"publisher\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.shortform.com\/blog\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.shortform.com\/blog\/#organization\",\"name\":\"Shortform Books\",\"url\":\"https:\/\/www.shortform.com\/blog\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.shortform.com\/blog\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2019\/06\/logo-equilateral-with-text-no-bg.png\",\"contentUrl\":\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2019\/06\/logo-equilateral-with-text-no-bg.png\",\"width\":500,\"height\":74,\"caption\":\"Shortform Books\"},\"image\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.shortform.com\/blog\/#\/schema\/person\/0421cce75bc249b11e2517b3a91f9c46\",\"name\":\"Darya Sinusoid\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.shortform.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2021\/07\/Untitled-design-1.png\",\"contentUrl\":\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2021\/07\/Untitled-design-1.png\",\"caption\":\"Darya Sinusoid\"},\"description\":\"Darya\u2019s love for reading started with fantasy novels (The LOTR trilogy is still her all-time-favorite). Growing up, however, she found herself transitioning to non-fiction, psychological, and self-help books. She has a degree in Psychology and a deep passion for the subject. She likes reading research-informed books that distill the workings of the human brain\/mind\/consciousness and thinking of ways to apply the insights to her own life. Some of her favorites include Thinking, Fast and Slow, How We Decide, and The Wisdom of the Enneagram.\",\"url\":\"https:\/\/www.shortform.com\/blog\/author\/darya\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"How Regressive Taxation Contributes to Inequality - Shortform Books","description":"Regressive taxation is the reason America is riddled with wealth inequality. Learn about the origins and effects of regressive taxation.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.shortform.com\/blog\/regressive-taxation\/","og_locale":"en_US","og_type":"article","og_title":"How Regressive Taxation Contributes to Inequality","og_description":"Regressive taxation is the reason America is riddled with wealth inequality. Learn about the origins and effects of regressive taxation.","og_url":"https:\/\/www.shortform.com\/blog\/regressive-taxation\/","og_site_name":"Shortform Books","article_published_time":"2022-07-31T22:49:00+00:00","article_modified_time":"2022-08-08T18:17:12+00:00","og_image":[{"width":2560,"height":1707,"url":"https:\/\/s3.amazonaws.com\/wordpress.shortform.com\/blog\/wp-content\/uploads\/2020\/07\/decrease-income-taxes-rich-dad-poor-dad-scaled.jpg","type":"image\/jpeg"}],"author":"Darya Sinusoid","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Darya Sinusoid","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.shortform.com\/blog\/regressive-taxation\/#article","isPartOf":{"@id":"https:\/\/www.shortform.com\/blog\/regressive-taxation\/"},"author":{"name":"Darya Sinusoid","@id":"https:\/\/www.shortform.com\/blog\/#\/schema\/person\/0421cce75bc249b11e2517b3a91f9c46"},"headline":"How Regressive Taxation Contributes to Inequality","datePublished":"2022-07-31T22:49:00+00:00","dateModified":"2022-08-08T18:17:12+00:00","mainEntityOfPage":{"@id":"https:\/\/www.shortform.com\/blog\/regressive-taxation\/"},"wordCount":698,"commentCount":0,"publisher":{"@id":"https:\/\/www.shortform.com\/blog\/#organization"},"image":{"@id":"https:\/\/www.shortform.com\/blog\/regressive-taxation\/#primaryimage"},"thumbnailUrl":"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2020\/07\/decrease-income-taxes-rich-dad-poor-dad-scaled.jpg","keywords":["The 1619 Project"],"articleSection":["Economics","Society"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.shortform.com\/blog\/regressive-taxation\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.shortform.com\/blog\/regressive-taxation\/","url":"https:\/\/www.shortform.com\/blog\/regressive-taxation\/","name":"How Regressive Taxation Contributes to Inequality - Shortform Books","isPartOf":{"@id":"https:\/\/www.shortform.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.shortform.com\/blog\/regressive-taxation\/#primaryimage"},"image":{"@id":"https:\/\/www.shortform.com\/blog\/regressive-taxation\/#primaryimage"},"thumbnailUrl":"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2020\/07\/decrease-income-taxes-rich-dad-poor-dad-scaled.jpg","datePublished":"2022-07-31T22:49:00+00:00","dateModified":"2022-08-08T18:17:12+00:00","description":"Regressive taxation is the reason America is riddled with wealth inequality. Learn about the origins and effects of regressive taxation.","breadcrumb":{"@id":"https:\/\/www.shortform.com\/blog\/regressive-taxation\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.shortform.com\/blog\/regressive-taxation\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.shortform.com\/blog\/regressive-taxation\/#primaryimage","url":"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2020\/07\/decrease-income-taxes-rich-dad-poor-dad-scaled.jpg","contentUrl":"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2020\/07\/decrease-income-taxes-rich-dad-poor-dad-scaled.jpg","width":2560,"height":1707},{"@type":"BreadcrumbList","@id":"https:\/\/www.shortform.com\/blog\/regressive-taxation\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.shortform.com\/blog\/"},{"@type":"ListItem","position":2,"name":"How Regressive Taxation Contributes to Inequality"}]},{"@type":"WebSite","@id":"https:\/\/www.shortform.com\/blog\/#website","url":"https:\/\/www.shortform.com\/blog\/","name":"Shortform Books","description":"The World's Best Book Summaries","publisher":{"@id":"https:\/\/www.shortform.com\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.shortform.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.shortform.com\/blog\/#organization","name":"Shortform Books","url":"https:\/\/www.shortform.com\/blog\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.shortform.com\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2019\/06\/logo-equilateral-with-text-no-bg.png","contentUrl":"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2019\/06\/logo-equilateral-with-text-no-bg.png","width":500,"height":74,"caption":"Shortform Books"},"image":{"@id":"https:\/\/www.shortform.com\/blog\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/www.shortform.com\/blog\/#\/schema\/person\/0421cce75bc249b11e2517b3a91f9c46","name":"Darya Sinusoid","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.shortform.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2021\/07\/Untitled-design-1.png","contentUrl":"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2021\/07\/Untitled-design-1.png","caption":"Darya Sinusoid"},"description":"Darya\u2019s love for reading started with fantasy novels (The LOTR trilogy is still her all-time-favorite). Growing up, however, she found herself transitioning to non-fiction, psychological, and self-help books. She has a degree in Psychology and a deep passion for the subject. She likes reading research-informed books that distill the workings of the human brain\/mind\/consciousness and thinking of ways to apply the insights to her own life. Some of her favorites include Thinking, Fast and Slow, How We Decide, and The Wisdom of the Enneagram.","url":"https:\/\/www.shortform.com\/blog\/author\/darya\/"}]}},"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2020\/07\/decrease-income-taxes-rich-dad-poor-dad-scaled.jpg","_links":{"self":[{"href":"https:\/\/www.shortform.com\/blog\/wp-json\/wp\/v2\/posts\/73144","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.shortform.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.shortform.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.shortform.com\/blog\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.shortform.com\/blog\/wp-json\/wp\/v2\/comments?post=73144"}],"version-history":[{"count":8,"href":"https:\/\/www.shortform.com\/blog\/wp-json\/wp\/v2\/posts\/73144\/revisions"}],"predecessor-version":[{"id":74813,"href":"https:\/\/www.shortform.com\/blog\/wp-json\/wp\/v2\/posts\/73144\/revisions\/74813"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.shortform.com\/blog\/wp-json\/wp\/v2\/media\/11211"}],"wp:attachment":[{"href":"https:\/\/www.shortform.com\/blog\/wp-json\/wp\/v2\/media?parent=73144"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.shortform.com\/blog\/wp-json\/wp\/v2\/categories?post=73144"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.shortform.com\/blog\/wp-json\/wp\/v2\/tags?post=73144"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}