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Explain how indirect taxes can be made progressive. - Economic Applications

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Question

Explain how indirect taxes can be made progressive.

Answer in Brief

Solution

Indirect taxes are regressive in nature as their burden falls on all people indiscriminately. Indirect taxes can be made progressive by imposing heavy taxes on luxury goods and by reducing rate of indirect taxes on necessary items like food, cloth, shelter. 

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Role of State in Economic Development
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Chapter 6: The State and Economic Development - QUESTION BANK [Page 172]

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Goyal Brothers Prakashan Economic Application [English] Class 10 ICSE
Chapter 6 The State and Economic Development
QUESTION BANK | Q 29. | Page 172
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