Advertisements
Advertisements
प्रश्न
An indirect tax can be made progressive by imposing higher tax rates on luxuries. Justify the above statement.
संक्षेप में उत्तर
Advertisements
उत्तर
The statement that "an indirect tax can be made progressive by imposing higher tax rates on luxuries" can be justified as follows:
- Indirect taxes, such as sales tax or VAT, are commonly regarded as regressive because they apply the same rate to all individuals, regardless of income.
- However, this system can be made more progressive by imposing greater taxes on luxury products and services primarily consumed by the wealthy.
- By raising tax rates on luxuries such as luxury automobiles, jewellery, designer clothes, and high-end equipment, the tax burden is more concentrated among individuals with higher incomes who can afford them.
shaalaa.com
Role of State in Economic Development
क्या इस प्रश्न या उत्तर में कोई त्रुटि है?
APPEARS IN
संबंधित प्रश्न
Taxes in which the rate of tax remains the same, though the tax bases changes are called ______.
Instruments of fiscal policy is:
Instrument of monetary policy is:
The major objective of monetary policy is ______.
Which of the statement is true for income tax?
Match the following:
| Column I | Column II | ||
| A. | Direct tax | (i) | Tax rate increases with tax base |
| B. | Indirect tax | (ii) | Tax rate remains constant |
| C. | Proportional tax | (iii) | Imposed on goods and services |
| D. | Progressive tax | (iv) | Impact and incidence lie on the same person |
Match the following:
| Column I | Column II | ||
| A. | Impact of tax | (i) | Price stability |
| B. | Incidence of tax | (ii) | Simple to calculate |
| C. | Objective of Monetary Policy | (iii) | Ultimate burden of tax |
| D. | Proportional tax | (iv) | Original imposition of tax |
Citing reason state the advantage of a progressive tax over proportional tax.
Define a tax.
Three demerits of an Indirect tax.
