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प्रश्न
Explain how tax can be used as an instrument to regulate consumption and production in an economy.
How are taxes used to regulate consumption and production?
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उत्तर
- Taxation policy regulates consumption and production in a country. Taxes are sometimes used to discourage the consumption and production of harmful commodities such as wine, cigarettes, etc.
- They are also effective in diverting the resources from production of non-essential commodities to essential goods.
- It can be done through differential commodity taxation by imposing heavy taxes on production of non-essential goods.
संबंधित प्रश्न
Taxes in which the rate of tax remains the same, though the tax bases changes are called ______.
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 : ______.
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 |
Define direct tax
Define a degressive tax.
What is meant by shifting of tax burden?
Briefly explain why direct taxes foster civic consciousness among people.
An indirect tax can be made progressive by imposing higher tax rates on luxuries. Justify the above statement.
State the four merits of a direct tax.
Explain how indirect taxes can be made progressive.
