ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Definition: Under this system of taxation, the tax rate diminishes as the taxable amount increases. In other words, there is an inverse relationship between the tax rate and taxable income. The rate of taxation decreases as the income of taxpayers increases.

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: -Regressive taxation is a type of taxation by the government in which a larger percentage of the income is taxed from the low income groups than the higher income groups. In regressive taxation, the taxes are uniform irrespective of the income of the tax payers. i.e the same taxes apply to all income groups.

Detailed explanation-4: -Regressive; it is likely that lower-income groups would spend a larger proportion of their income on the taxed items than would higher-income groups. Excise taxes can also be considered proportional since everyone is taxed at the same rate.

Detailed explanation-5: -Indirect taxes, such as sales and service taxes, are examples of regressive taxes because both the rich and the poor pay the same tax when buying ordinary goods and services. Other regressive taxes include: Sales Tax. Property Tax.