Question

The following table indicates: 

Tax Base in ₹	Rate of tax in %
10,000	8
20,000	8
30,000	8
40,000	8

Options

• Progressive taxation

• Regressive taxation

• Proportional taxation

• Degressive taxation

Answer 1

Proportional taxation

Explanation:

1. The table shows a proportional tax system. In this system, the tax rate stays at 8% regardless how large the tax base is (₹ 10,000, ₹ 20,000, ₹ 30,000, or ₹ 40,000).
2. In a balanced tax system, everyone pays the same amount of their income, no matter how much they make. In other words, the tax rate stays the same regardless of how much cash is made or how much tax is collected.