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Question
Classify the following type of tax into direct and indirect taxes:
Entertainment tax
One Line Answer
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Solution
Indirect Tax
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Role of State in Economic Development
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Chapter 6: The State and Economic Development - QUESTIONS [Page 167]
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RELATED QUESTIONS
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
Citing reason state the advantage of a progressive tax over proportional tax.
Give two reasons why the government imposes tax?
Explain how indirect taxes can be inflationary.
An indirect tax can be made progressive by imposing higher tax rates on luxuries. Justify the above statement.
How does the state fulfil the following socio-economic objective?
Promoting industrial growth.
Explain the term Impact of a tax.
Explain how indirect taxes can be made progressive.
Citing reasons state the superiority of Progressive tax over regressive tax.
