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Questions
What is meant by regressive taxation?
What are regressive taxation?
Explain the following with examples:
Regressive tax
What is regressive tax? Give an example.
What is a regressive tax?
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Solution
- Regressive tax is the opposite of progressive tax. A tax will be regressive when the rate of tax decreases as the tax base increases. Thus, it is directly opposite of progressive tax.
- The chief examples of regressive taxes are on these goods whose consumption society wishes to discourage, such as tobacco and alcohol.
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RELATED QUESTIONS
The essential feature of a tax.
The government imposes tax ______.
The following table indicates:
| Tax Base in ₹ | Rate of tax in % |
| 10,000 | 8 |
| 20,000 | 8 |
| 30,000 | 8 |
| 40,000 | 8 |
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.
An indirect tax can be made progressive by imposing higher tax rates on luxuries. Justify the above statement.
How does the state fulfil the following socio-economic objective?
Promoting industrial growth.
Explain the significance of taxes.
Explain the state's role in achieving the objective of social justice in less developed countries.
Citing reasons state the superiority of Fostering civic consciousness by direct tax over the same by indirect tax.
