ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Proportional taxes maintain equal tax incidence regardless of the ability-to-pay and do not shift the incidence disproportionately to those with a higher or lower economic well-being. Flat taxes are defined as levying a fixed (“flat”) fraction of taxable income.

Detailed explanation-2: -GST is an example of proportional tax where everyone pays the same tax irrespective of the income group.

Detailed explanation-3: -flat tax-Another term for a proportional tax. 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-4: -What Is a Proportional Tax? A proportional tax is an income tax system that levies the same percentage tax to everyone regardless of income. A proportional tax is the same for low, middle, and high-income taxpayers. Proportional taxes are sometimes referred to as flat taxes.

Detailed explanation-5: -Indirect taxes are generally ‘Proportional’ in nature.