section_path: Economic effects/Increased economic welfare/Reduced inequality
section_name: Reduced inequality
paragraph_text: Reduced inequality
  
  Progressive taxation generally reduces economic inequality, even when the tax revenue is not redistributed from higher-income individuals to lower-income individuals. However, in a highly specific condition, progressive taxation increases economic inequality when lower-income individuals consume goods and services produced by higher-income individuals, who in turn consume only from other higher-income individuals (trickle-up effect).