Ace the A Level Economics AQA Exam 2025 – Power Up and Conquer the Market!

Question: 1 / 400

What impact does progressive taxation aim to have on economic inequality?

To increase overall tax revenue regardless of income

To reduce the tax burden on the wealthy

To redistribute wealth from higher income brackets to lower ones

Progressive taxation is designed to address economic inequality by imposing higher tax rates on those with greater income levels. The main goal of this system is to redistribute wealth, meaning that individuals and households with higher income contributions help fund social programs and services that benefit those with lower incomes. This redistribution process aims to reduce the income gap between the rich and the poor, aiding in the provision of essential services such as healthcare, education, and social welfare for lower-income individuals.

By taxing the wealthy at a higher rate, the government can allocate resources more equitably, which helps to improve the overall standard of living for the less affluent and contributes to a more balanced economic environment. In essence, progressive taxation functions as a tool for social equity, promoting a reduction in economic disparities.

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To create a flat tax rate across all income levels

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