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Question
Which one is better progressive or regressive taxation and why?
Answer in Brief
Solution
- Progressive taxation is typically thought to be more effective in achieving social equity and fairness. This is because progressive taxes impose a greater burden on those with the financial means to contribute more, decreasing the gap between the rich and the poor. Progressive taxation is considered more equitable.
- In contrast, regressive taxes can worsen income inequality by imposing a disproportionately heavy cost on those who are already struggling financially. This can result in social and economic imbalances, making it a less desirable alternative for promoting fairness and equity in society.
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