Question

State any three points of distinction between progressive taxation and degressive taxation.

Answer 1

Basis	Progressive Taxation	Degressive Taxation
Tax Rate	The tax rate rises with an increase in income.	The tax rate is higher at lower income levels and becomes constant after a certain point.
Fairness	It is considered fairer because people with higher incomes pay a larger percentage.	It is considered less fair since lower-income groups bear a heavier burden.
Effect on Income Gap	It helps narrow the gap between the rich and the poor.	It does not significantly reduce income inequality.