In reality in many developing countries (and some developed countries), the gap between what is supposed to be a progressive tax structure and what different income groups actually pay can be substantial. Progressive tax structures
on paper often turn out to be regressive taxes in practice, in that the lowerand middle-income groups often end up paying a proportionally larger share of their incomes in taxes than the upper-income groups. The reasons for this are simple. The poor are often taxed at the source of their incomes or expenditures (by withholding taxes from wages, general poll taxes, or indirect taxes levied on the retail purchase of goods such as cigarettes and beer).