There’s little incentive to increase the region population, because sims residing outside the capitol don’t generate simoleons at all but you have to provide city services (sewer, police, etc) and they don’t generate local currency similar to the omega buildings, so what’s the point?
Simple answer: To pull gold from the game. Since regions were introduced, gold became a valuable resource again that you need to manage smartly.
Regions do pay taxes. Look at your City Hall. The taxes are based on the population of your Capital City and Regions.
No it isn't. While it is true that the number that appears on the town hall is the sum of all areas, the taxes are based only on your main city population.
Make a simple test. When you upgrade any building on the regions, the taxes don't increase, but when you upgrade a building on the capital, it does increase.