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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
Fiscal policy means public expenditure and tax policy of the government.
Which of these taxes is most likely to be progressive?
Define fiscal policy.
Name any two instruments of Fiscal Policy.
Differentiate between direct and indirect taxes.
Explain clearly tour ways by which the state can promote economic growth and development.
How does the state fulfil the following socio-economic objective?
Promoting industrial growth.
Explain how tax can be used as an instrument to regulate consumption and production in an economy.
Give two examples of direct taxes.
Define the following term:
Fiscal deficit
