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प्रश्न
How can tax be used as an instrument to bring about equitable distribution of wealth and income?
How can direct taxes reduce income inequalities.
Mention one way by which the government can reduce the disparity in income and wealth distribution of its citizens in a developing economy.
Explain two ways by which the government can reduce income inequalities in a developing economy.
How can the government help in reducing inequalities of income?
Can direct taxes reduce income inequality?
Explain how taxation can be used to reduce inequality of income.
How does direct tax reduce income inequality?
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उत्तर
The government can reduce income inequalities in the following ways:
- Direct taxes are progressive in nature.
- Rich people are subjected to higher rates of taxation, while the poor are exempt from direct taxes.
- The policy of transfer payments (like old age pensions and unemployment allowances) can be used to transfer incomes to poor people.
- The government may subsidise the consumption expenditure of low-income groups by providing subsidised food through fair-priced shops.
- Hence, these taxes help in removing inequalities of income.
Notes
Students should refer to the answer according to their questions.
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संबंधित प्रश्न
______ is an example of commercial revenues.
The government imposes tax ______.
Fiscal policy means public expenditure and tax policy of the government.
Monetary policy means regulation of money supply by the monetary authority.
A policy under which the government uses its expenditure and revenue to produce desirable effect and avoid undesirable effects on the national income, production and employment. This defines ______.
The tax whose rate remains unchanged irrespective of the income of the taxpayer is called as ______.
Match the following:
| Column I | Column II | ||
| A. | Impact of tax | (i) | Price stability |
| B. | Incidence of tax | (ii) | Simple to calculate |
| C. | Objective of Monetary Policy | (iii) | Ultimate burden of tax |
| D. | Proportional tax | (iv) | Original imposition of tax |
State the difference between income tax and expenditure tax.
State two drawbacks of direct taxes.
Explain the significance of taxes.
