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Questions
Under ______ the rate of tax increases with rise in tax payer's income.
Identify which of the following option is correct?
Under ______ the rate of tax increases with rise in tax payer's income.
Options
Progressive taxation
Proportional taxation
Regressive taxation
Digressive taxation
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Solution
Under Progressive taxation the rate of tax increases with rise in tax payer's income.
Explanation:
- Under progressive taxation, the rate of tax increases as the taxpayer's income rises.
- This means that individuals with higher incomes pay a higher percentage of their income in taxes, which is designed to reduce income inequality and ensure that those who have the ability to pay more do so.
RELATED QUESTIONS
______ is an example of commercial revenues.
______ are those taxes which are paid by the same person on whom they have been imposed.
Identify the tax which is most likely to faster civic conciousness.
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 |
An indirect tax is not always equitable. Give two reasons to support your answer.
What is meant by shifting of tax burden?
Give an example of Indirect tax.
Explain how indirect taxes can be inflationary.
Explain the term Impact of a tax.
Define the following term:
Fiscal deficit
