Advertisements
Advertisements
Question
Differentiate between progressive and regressive taxes giving an example for each.
Distinguish Between
Advertisements
Solution
| S. No. | Progressive tax | Regressive tax |
| 1. | Under progressive taxation, the rate of tax increases as tax payer's income increases. | A regressive tax is one in which the rate of tax decreases as the tax payer’s income increases. |
| 2. | It has more financial impact on higher income individuals. | Regressive taxes have a greater impact on lower income individuals. |
| 3. | It is based on the principle of ability to pay. | It is not based on the principle of ability to pay. |
| 4. | Example - Income tax. | Example - Sales tax. |
shaalaa.com
Role of State in Economic Development
Is there an error in this question or solution?
Chapter 6: The State and Economic Development - QUESTIONS [Page 168]
APPEARS IN
RELATED QUESTIONS
______ is an example of commercial revenues.
Which of the following is an advantage of direct taxes?
Identify the tax which is most likely to faster civic conciousness.
The following table indicates:
| Tax Base in ₹ | Rate of tax in % |
| 10,000 | 8 |
| 20,000 | 8 |
| 30,000 | 8 |
| 40,000 | 8 |
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 |
To which tax is this shifting of tax burden relevant?
Briefly explain why direct taxes foster civic consciousness among people.
Which one is better progressive or regressive taxation and why?
How does the state fulfil the following socio-economic objective?
Reducing income inequality.
Explain the state's role in achieving the objective of social justice in less developed countries.
