An<u><em> indirect tax </em></u>is usually collected by the producer or retailer, and it is added to the price of the good itself. These taxes are the same for all individuals, no matter their income. They are said to have a regressive nature. On the other hand, <em><u>direct taxes</u></em> are paid directly to the government. The amount paid for a direct tax depends on the ability-to-pay of each individual. Therefore, those with higher incomes pay higher direct taxes. Examples of direct taxes-include: corporate income taxes, paycheck withholdings, and property taxes.
