ECONOMICS
FISCAL POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A tax of £10, 000 on all earnings is ____
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____ a regressive tax.
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____ a proportional tax.
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____ a progressive tax.
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____ an indirect tax.
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Explanation:
Detailed explanation-1: -Taxes like sales tax, fuel tax, excise tax, social security payroll fall under the purview of regressive taxes.
Detailed explanation-2: -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.
Detailed explanation-3: -Among many others, examples of a regressive tax include: Sales Tax. Property Tax. Excise Tax.
Detailed explanation-4: -However the confusion still remains as although on principle GST is a regressive tax, steps taken by the lawmakers has given it some character of a progressive tax.
There is 1 question to complete.