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प्रश्न
Citing reason state the advantage of a progressive tax over proportional tax.
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उत्तर
- Progressive tax systems are created to charge a higher tax rate on persons or businesses with higher incomes, providing a benefit of equity and fairness.
- Proportional tax affects low-income earners and high income earners equally. But a progressive tax has more financial impact on high income earners than on low income earners. That is why a progressive tax is considered better and more fair.
- Example: In a progressive system, a person earning ₹ 100,000 per year may pay 25% in taxes, while someone earning ₹ 30,000 may pay only 10%. A proportionate tax system would require both to pay the same percentage, say 15%, with the lower-income person bearing most of the cost.
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संबंधित प्रश्न
Which of the following is an advantage of direct taxes?
Which of the following taxes generate civic consciousness among people?
Define direct tax
'The role of the State is important in developing the economic infrastructure of a developing economy'. Give two reasons to support your answer.
State the difference between income tax and expenditure tax.
An indirect tax is not always equitable. Give two reasons to support your answer.
Explain how tax can be used as an instrument to regulate consumption and production in an economy.
Explain the state's role in achieving the objective of social justice in less developed countries.
Explain how indirect taxes can be made progressive.
Citing reasons state the superiority of Progressive tax over regressive tax.
