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Question
Wealth tax is an example of:
Options
Direct tax
Indirect tax
Proportional tax
Degressive tax
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Solution
Direct tax
Explanation:
Wealth tax is imposed on an individual's wealth, and that individual is required to pay the tax. A direct tax is one in which both the impact and the burden fall on the same individual.
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RELATED QUESTIONS
The government imposes tax ______.
Taxes in which the rate of tax remains the same, though the tax bases changes are called ______.
Fiscal policy means public expenditure and tax policy of the government.
Which of these taxes is most likely to be progressive?
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 |
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 |
Define direct tax
Differentiate between direct and indirect taxes.
Classify the following type of tax into direct and indirect taxes:
Sales tax
Explain the following with examples:
Progressive tax
