SALES TAX: A tax on retail sales. This is major source of revenue for many state and local governments. Because poorer people tend to spend a larger share of their income on stuff covered by sales taxes, it tends to be a regressive tax. To reduce this regressiveness, some state and local governments excluded items like food and medicine. See also | tax | income | regressive tax | proportional tax | progressive tax | ability-to-pay principle | benefit principle |
