A Look at Progressive & Regressive Taxation

This the first article in a two-part series breaking down the meaning behind the 2025 Global Days of Action banner of “Progressive Taxation for an Inclusive and Just Social Organisation of Care.”

By: Alexandra Wenzel, GATJ Global Communications Coordinator

In the tax justice movement, we talk a lot about progressive taxation – and its counterpart, regressive taxation (1).

Why progressive taxation?

Progressive taxation means that the richer in a society, those with higher income and/or more wealth, pay more tax in proportion to their revenue than those with lower income. This is opposed to regressive taxation, where the poorer in a society pay a larger proportion of their income in tax than the richer.

In principle, a country’s tax system is composed of a mix of different types of taxes including, but not limited to, income taxes, consumption taxes, corporate taxes, wealth taxes, and inheritance taxes. What matters for the overall progressiveness of a tax system is the share of these different types of taxes in the overall tax take and the rates applied to them.

What is regressive taxation and why does it matter?

Regressive taxation refers to tax systems where lower-income individuals and households pay a higher percentage of their income in taxes compared to wealthier individuals.

For example, regressive tax systems occur when governments rely heavily on consumption taxes, such as sales taxes, excise duties, or value-added taxes (VAT), rather than progressive income or corporate taxes. According to the UN Committee on Economic, Social, and Cultural Rights, regressive taxation harms those with little to no income the most, which is disproportionately women, as they spend the majority of their income on essential goods and services, such as food. Spending a larger portion of income on taxed goods and services results in a higher tax burden compared to wealthier individuals with more disposable income. To make matters worse, the tax burden hurts informal workers the hardest. These workers pay into flat-rate taxes and VAT yet themselves do not benefit from the social security benefits partly financed by their indirect tax contribution. In comparison, corporations receive state subsidies and tax rebates. In the end, such regressive tax systems disproportionately burden the poor, and women, particularly those in low-income and marginalized communities, deepening gender inequality.

The negative impact of regressive taxation on women cannot be overlooked.

In fact, for 40 years, governments across the world have rolled back taxes on big corporations and the rich, often under the pressure of international financial institutions and lobbying investors. At the same time, big corporations and the wealthy have taken advantage of our broken international tax system to commit tax abuse and hide revenues in tax havens, depriving governments of their ability to raise public tax revenue which results in billions of annual tax revenue losses. Lack of revenue, and the failure by governments to collect adequate taxes through progressive taxation, often leads to austerity measures with most governments around the globe opting to reduce funding on public and care services that are essential for gender equality, forcing primarily women to take up these roles.

Instead of redistributing wealth within society, a core function of progressive taxation, regressive taxes deepen inequalities as they take proportionally more from the poor and in a sense give to the rich, as the rich are more likely to benefit from tax breaks and business subsidies. This amplifies the gap between the rich and poor, entrenching social and economic disparities. In response to these challenges, there has been a growing global movement calling for tax reforms, both in the Global North and the Global South, advocating for policies that are fair, progressive, and that generate resources to realise human rights and gender equality.

It is time that our tax systems are progressive.

What does progressive taxation mean in practice?

By ensuring that those with greater capacity to pay contribute more, progressive taxation can reduce inequalities in a society. Adequately taxing the rich and multinational corporations can also create the fiscal space needed for governments to fund gender-transformative quality public services that meet the diverse needs of all citizens, particularly women and marginalized groups. Progressive taxes help finance policies and public services that reduce inequalities, empower women, and promote social and economic justice.

What do we want to change?

Under the Global Days of Action on Tax Justice for Women’s Rights, we demand an end to regressive tax systems. We call for the creation of genuinely progressive tax systems which tax the rich and multinational corporations so that everyone pays their due share. It means implementing progressive taxes; preventing multinationals from profit shifting to avoid paying taxes where their economic activities occur, and fighting illicit financial flows by fixing the broken international tax system that facilitates tax avoidance by multinational corporations and the rich. This can, and must happen, through a UN Framework Convention on International Tax Cooperation (UN Tax Convention). Ensuring progressive taxation and the adequate collection of taxes would create the fiscal space needed to fund gender equality, human rights, development, climate action, and public services including childcare, eldercare, healthcare, social care and social protection, with a focus on reducing the disproportionate caregiving burden on women, families, and marginalized groups.

We also call for the repeal of regressive tax policies that negatively impact women and marginalised communities. Beyond generating revenue, these progressive taxes could help shift power dynamics, empowering women and fostering a more equitable societal infrastructure for all.

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The tax justice movement fights for tax and fiscal policies that enable people to share in local and global prosperity; access the public services and social protections needed to fulfill human rights including quality healthcare, education, and infrastructure; and benefit from inclusive and sustainable economies that work to eliminate inequalities.

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