Lump-Sum Taxation Law and Legal Definition
The tax laws of some countries allow the tax authorities to levy a fixed amount of taxes on income in certain circumstances which deviates from the normal method of applying a rate to income to ascertain taxes payable.
Lump-Sum Tax is a regressive tax, such that the lower income is, the higher percentage of income applicable to the tax.
Examples include personal property taxes on cars or business equipment regardless of income or ability to pay; and real estate taxes where senior citizens often have to pay an extremely large percentage of their retirement income (especially when living on social security) to continue living in a home they purchased during their working years.
