Final answer:
A regressive tax takes a lower percentage of income as income increases, placing a larger financial burden on lower-income individuals in terms of the proportion of their income paid in taxes.
Step-by-step explanation:
A tax that takes a relatively lower percentage as income increases is known as a regressive tax. This form of taxation places a larger burden on those with lower incomes, as they pay a higher proportion of their income in taxes compared to those with higher incomes. Regressive taxes include sales taxes and excise taxes on specific goods, such as gasoline or tobacco. Unlike progressive taxation, where the rate increases with higher income levels, regressive taxes decrease in percentage as income rises. It is important to note that while the overall dollar amount may be higher for wealthier individuals, the impact on their disposable income is less significant.