Regressive Tax

Dear Management Doctor:

I have the following questions. I would appreciate it if anyone could help answer these.

  1. What is a "Regressive tax?"
  2. How can a "self-sustaining community" become an independent municipality, secede from the county and become a recognized town?

Leon K. Jensen
Canyon County, CO

Dear Leon,

  1. Regressive Tax Under a Regressive Tax, the less you earn, the higher your tax rate. Good examples are the sales tax, gas tax, cigarette tax and the lottery. On the other hand, a Progressive Tax is the more you earn, the higher your tax rate. A good example of this is the income tax, or at least it was more so until it became "Bushified." The current Democrat candidates for President are talking about this concept but so far I haven't heard any of them use the R or P words. I could write many pages on this topic, but here is a better way. Simply put the word "regressive tax" into Google and you will be surprised at how much pops up.
  2. Independent Municipalities Becoming an independent municipality is controlled in most states by state law. In California we have specific rules to follow. These rules are monitored in each county by a Local Agency Formation Commissions (LAFCOs). By the way, I don't think you ever secede from the county. You only shift certain functions from the county to the municipality or take on additional functions not currently handled by the county. Sounds like a good idea, check your state laws.

Best wishes,

The Management Doctor


Reader Responses

Independent Municipalities

If my memory serves and the law hasn't changed, Virginia has some independent municipalities inside some counties. It's as if you took a knife and cut out a section of the county. A Virginia planner would obviously know more and would be able to provide details. I worked with some of these entities back in my TVA days.

Nancy Benziger Brown


Perhaps it was not intended as such, but my first gut reaction to your use of this phrase (Bushified) was negative. Please don't assume that all us planning directors are liberals.

Mike Benedict
Hood River, Oregon

Response from the Doctor

Thanks for the correction. I didn't intend to favor either a progressive or regressive tax. My only point is that the current Washington administration and congress have reduced the progressive nature of the income tax, even though it is still progressive. Some argue (mostly Democrats) that the reduction in the income tax has resulted in states and cities increasing sales, gas, cigarette and similar taxes, all regressive in nature.

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