Advertisements
Advertisements
Question
With reference to the taxation policy.
Differentiate between progressive and regressive taxes giving an example for each.
Advertisements
Solution
| S. No. | Progressive tax | Regressive tax |
| 1. | Under progressive taxation, the rate of tax increases as tax payer's income increases. | A regressive tax is one in which the rate of tax decreases as the tax payer’s income increases. |
| 2. | It has more financial impact on higher income individuals. | Regressive taxes have a greater impact on lower income individuals. |
| 3. | It is based on the principle of ability to pay. | It is not based on the principle of ability to pay. |
| 4. | Example - Income tax. | Example - Sales tax. |
APPEARS IN
RELATED QUESTIONS
The essential feature of a tax.
______ is an example of commercial revenues.
The government imposes tax ______.
Taxes in which the rate of tax remains the same, though the tax bases changes are called ______.
A policy under which the government uses its expenditure and revenue to produce desirable effect and avoid undesirable effects on the national income, production and employment. This defines ______.
Distinguish between fiscal policy and monetary policy.
Citing reason state the advantage of a progressive tax over proportional tax.
Briefly explain why direct taxes foster civic consciousness among people.
Draw a neat labelled diagram for progressive taxation.
How does the state fulfil the following socio-economic objective?
Promoting industrial growth.
