ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -progressive tax-A tax that takes a larger percentage of income from high-income groups than from low-income groups. proportional tax-A tax that takes the same percentage of income from all income groups. regressive tax-A tax that takes a larger percentage of income from low-income groups than from high-income groups.

Detailed explanation-2: -Progressive and regressive tax A progressive tax is a tax where the tax rate increases with increase in the taxpayer’s income. Here, individual who get high income pay higher proportion of there income as tax. On the other hand, in the case of regressive tax, tax rate decreases with increase in income.

Detailed explanation-3: -According to Dalton, “In proportional taxation all the tax payers pay their taxes according to the equal proportion of this income”. Progressive Tax-Progressive tax system is a system in which not only the income increases as well as the rate of tax. Its principle is, “More income, more rate of tax”.

Detailed explanation-4: -regressive tax, tax that imposes a smaller burden (relative to resources) on those who are wealthier. Its opposite, a progressive tax, imposes a larger burden on the wealthy. A change to any tax code that renders it less progressive is also referred to as regressive.