The principle that justifies a regressive tax is typically the benefits-received principle. This principle suggests that individuals should pay taxes in relation to the benefits they receive from public services and goods. In a regressive tax system, lower-income individuals may pay a higher percentage of their income in taxes compared to higher-income individuals, but they might receive significant benefits from certain government services, hence the justification.
While the ability-to-pay principle is often associated with progressive taxation (where higher earners pay a larger proportion of their income), the benefits-received principle can be invoked to justify particular regressive taxes, particularly if the services funded by such taxes are seen as disproportionately benefiting lower-income individuals.
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