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Question
The government imposes tax ______.
Options
To raise revenue
To reduce inequalities of income and wealth
Both to raise revenue and to reduce inequalities of income and wealth
Neither to raise revenue nor to reduce inequalities of income and wealth
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Solution
Both to raise revenue and to reduce inequalities of income and wealth.
Explanation:
- The government imposes taxes to raise revenue for funding public services, infrastructure, and other government activities.
- Taxes are also used to reduce inequalities of income and wealth by redistributing wealth through progressive taxation and social welfare programs.
RELATED QUESTIONS
The following table indicates:
| Tax Base in ₹ | Rate of tax in % |
| 10,000 | 8 |
| 20,000 | 8 |
| 30,000 | 8 |
| 40,000 | 8 |
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