ECONOMICS
FISCAL POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -Income tax and wealth tax are a form of direct tax. Income tax is levied on the income or profits of the person whereas wealth tax is levied on the assets owned by individuals.
Detailed explanation-2: -Indirect taxes, on the other hand, do not look at the consumer’s ability to pay but are the same for everyone who buys the goods or services. Examples of indirect taxes are excise tax, VAT, and service tax. Examples of direct taxes are income tax, personal property tax, real property tax, and corporate tax.
Detailed explanation-3: -Hence, gift tax is not an indirect tax.
Detailed explanation-4: -It is levied on the income or profit of a taxpayer. An indirect tax is levied on goods and services rather than on income or profits. Taxpayers pay it directly to the government.