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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
Instrument of monetary policy is:
Observe the relationship of the first pair of words and complete the second pair:
Tax paid by person on whose it is imposed : Direct tax.
A tax is paid by some person and the final burden is born by some other person : ______.
Which of the following taxes generate civic consciousness among people?
How can tax be used as an instrument to bring about equitable distribution of wealth and income?
Define a degressive tax.
Classify the following type of tax into direct and indirect taxes:
House tax
What is meant by regressive taxation?
How does the state fulfil the following socio-economic objective?
Environmental protection.
Explain the term Impact of a tax.
Define the following term:
Fiscal deficit
