The terms progressive, regressive, and proportional are used to describe the effect of a tax on private income distribution. Most economists define these concepts in terms of average tax rate, or ratio of tax paid to income. If the average tax rate increases with income, the tax system is progressive; if it falls, the tax is regressive. A tax is proportional if the average tax rate is constant across all income levels. This entry discusses the principles of tax equity and the measurement of the economic burden of a tax. It concludes with a discussion of the roles of economics and ethics in the consideration of fairness in taxation.

Since at least the time of Adam Smith, economists and social philosophers have considered the requirements of ...