But the tax structure also varies by state, which can look far more regressive at local levels. When you account for both the progressive and regressive taxes in the major Western countries, the United States has a particularly progressive tax system. We don’t have VAT in the United States, but in Europe, they use VAT to charge a consumption tax on products at each step of the supply chain when any value is added. In Western Europe, the primary regressive tax is their value-added tax (VAT). In the United States, these taxes include sales and excise taxes. In the United States and most other countries, income taxes are intended to be progressive - Higher earners pay a more significant percentage of their income in taxes.īut consumption taxes, meaning those you pay based on things you buy, tend to be regressive across the board. Similar to the United States, many other countries in the world have a combination of progressive and regressive taxes that make up their tax revenue.
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