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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.
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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.
Instrument of monetary policy is:
Match the following and select the correct option:
| Column A | Column B | ||
| (i) | Taxes imposed on income and wealth | A. | Regressive |
| (ii) | Taxes imposed on goods and services | B. | Progressive |
| (iii) | A tax system where the rate of tax decreases with increase income | C. | Direct taxes |
| (iv) | A tax system where the rate of tax increases as income increase | D. | Indirect taxes |
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 ______.
Define Indirect tax
What is meant by shifting of tax burden?
Classify the following type of tax into direct and indirect taxes:
Sales tax
Give one example of progressive tax.
Which one is better progressive or regressive taxation and why?
Citing reasons state the superiority of Progressive tax over regressive tax.
