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प्रश्न
An indirect tax is not always equitable. Give two reasons to support your answer.
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उत्तर
An indirect tax is often considered not always equitable for the following two reasons:
- Burden on low-income groups: Indirect taxes, such as sales tax or VAT, apply to all individuals, regardless of income level. This means that low-income people pay the same tax rate as high-income people for products and services. As a result, a more significant proportion of their income is used to pay these taxes, increasing their tax burden.
- Indirect taxes do not account for the taxpayer's ability to pay. Since everyone pays the same rate, these taxes make no difference between those who can afford to pay more and those who cannot.
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संबंधित प्रश्न
Match the following and select the correct option:
| Column A | Column B | ||
| (i) | Taxes imposed on income and wealth | A. | Regressive |
| (ii) | Taxes imposed on goods and services | B. | Progressive |
| (iii) | A tax system where the rate of tax decreases with increase income | C. | Direct taxes |
| (iv) | A tax system where the rate of tax increases as income increase | D. | Indirect taxes |
Read the following statements carefully and choose the correct alternative:
Assertion (A): Income tax is a direct tax.
Reason (R): GST is an indirect tax.
Define fiscal policy.
How can tax be used as an instrument to bring about equitable distribution of wealth and income?
Distinguish between fiscal policy and monetary policy.
What is meant by regressive taxation?
Explain clearly tour ways by which the state can promote economic growth and development.
How does the state fulfil the following socio-economic objective?
Environmental protection.
Explain the term Impact of a tax.
Explain the term Incidence of a tax.
