Tax systems fall into three main categories within the tax code: regressive, proportional and progressive taxes. Regressive taxes are those that have a greater impact on low-income individuals than high-income earners. A proportional tax, also referred to as a flat tax, impacts low-, middle- and high-income earners relatively equally.
A progressive tax has more of an impact on higher-income individuals and businesses, and less of a financial impact on low-income earners.
