Question

Distinguish between proportionate, progressive and regressive tax systems.

Answer 1

Aspect	Proportionate tax	Progressive tax	Regressive tax
Meaning	A tax is called proportional when the rate of taxation remains the same as the income of the taxpayer increases.	A tax is called progressive when the rate of taxation increases as the taxpayer's income increases.	A regressive tax is one in which the rate of taxation decreases as the taxpayer's income increases.
Tax Rate	Constant for all income levels.	Increases with higher income.	Decreases as income increases.
Impact on Income Groups	Equal burden in percentage terms.	Heavier burden on the rich.	Heavier burden on the poor.
Example	Flat income tax at 10%.	Income tax: 5% on ₹5L, 20% on ₹20L.	Indirect taxes (e.g., GST on necessities vs luxuries).