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Questions
What is meant by shifting of tax burden?
Explain the term Shifting of a tax.
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Solution
Shifting of the tax burden is the process by which the person or business legally responsible for paying a tax transfers that burden to another party. This happens when the taxpayer's tax responsibility is passed to someone else, usually through changes in prices or costs.
RELATED QUESTIONS
The government imposes tax ______.
Taxes in which the rate of tax remains the same, though the tax bases changes are called ______.
Match the following and select the correct option:
| Column A | Column B | ||
| (i) | Taxes imposed on income and wealth | A. | Regressive |
| (ii) | Taxes imposed on goods and services | B. | Progressive |
| (iii) | A tax system where the rate of tax decreases with increase income | C. | Direct taxes |
| (iv) | A tax system where the rate of tax increases as income increase | D. | Indirect taxes |
Define fiscal policy.
Citing reason state the advantage of a progressive tax over proportional tax.
Give an example of Indirect tax.
State two differences between income tax and commodity tax.
Explain the following with examples:
Progressive tax
Citing reasons state the superiority of Progressive tax over regressive tax.
Citing reasons state the superiority of Fostering civic consciousness by direct tax over the same by indirect tax.
