(a) Define categorical inequality and give an example. Is this type of inequality usually considered fair? Explain why or why not.

(b) In 2001 the Australian Federal Government introduced the Goods and Services Tax (GST) as part of its taxation reform package, where everyone pays an equal 10% GST on top of the price of each good or service they purchase. Is this tax progressive, regressive or distributionally neutral? Explain your answer.

(c) Name and briefly explain any three policies the government could use to reduce inequality.