OKPOLICY.ORG
A regressive tax is a type of tax that takes a larger percentage of income from low-income individuals or households than from high-income individuals or households. In other words, as income decreases, the proportion of income paid in taxes increases. This is in contrast to a progressive tax, where the tax rate increases as income increases.
Regressive taxes tend to have a disproportionate impact on lower-income individuals because they impose a higher burden on their limited financial resources. Examples of regressive taxes include sales taxes and flat taxes, where everyone pays the same percentage of their income regardless of their income level.
The Institute on Taxation and Economic Policy in 2024 ranked Oklahoma’s tax system as the nation’s 16th most regressive as part of the 7th edition of its Who Pays? report. Oklahoma’s high state and local sales tax rates – sixth highest in the nation – bear primary responsibility for the overall regressivity of the state’s tax system.
