What is the purpose of regressive tax?

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2026-08-01 15:15

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The purpose of a regressive tax is to generate revenue for the government while placing a heavier financial burden on lower-income individuals compared to higher-income earners. This type of tax system often taxes basic goods and services, meaning that those with less income spend a larger percentage of their earnings on these taxes. While regressive taxes can provide essential funding for public services and infrastructure, they can also exacerbate income inequality.

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