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Taxation and Subsidy

Taxation and Subsidy

Author: Catherine Barry

This lesson will explain Taxation and Subsidy

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Terms to Know
Flat Tax

Amount of tax applied to all levels of income without exemptions or deductions.

Percentage Tax

Tax based on a certain percentage of the price of the good.

Progressive Taxation

Tax increases as income increases.

Regressive Taxation

A flat tax that results in a higher percentage as a proportion of income being paid by lower income earners compared with higher income earners.


Support offered by the government to a business or individual to incentivize production of a good or service.