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प्रश्न
An indirect tax is not always equitable. Give two reasons to support your answer.
उत्तर
An indirect tax is often considered not always equitable for the following two reasons:
- Burden on low-income groups: Indirect taxes, such as sales tax or VAT, apply to all individuals, regardless of income level. This means that low-income people pay the same tax rate as high-income people for products and services. As a result, a more significant proportion of their income is used to pay these taxes, increasing their tax burden.
- Indirect taxes do not account for the taxpayer's ability to pay. Since everyone pays the same rate, these taxes make no difference between those who can afford to pay more and those who cannot.
APPEARS IN
संबंधित प्रश्न
The essential feature of a tax.
Under ______ the rate of tax increases with rise in tax payer's income.
The major objective of monetary policy is ______.
Which of the statement is true for income tax?
Distinguish between fiscal policy and monetary policy.
State the difference between income tax and expenditure tax.
Classify the following type of tax into direct and indirect taxes:
House tax
Briefly explain why direct taxes foster civic consciousness among people.
Which one is better progressive or regressive taxation and why?
Discuss four fiscal policy objectives with reference to India.
