ECONOMICS
INCOME DISTRIBUTION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Progressive income, consumption and wealth taxes
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Redistributive welfare transfers
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Strengthening wage floors and employment rights in the labour market
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Tackling structural barriers to employment
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Detailed explanation-1: -Definition: Progressive tax is the taxing mechanism in which the taxing authority charges more taxes as the income of the taxpayer increases. A higher tax is collected from the taxpayers who earn more and lower taxes from taxpayers earning less. The government uses a progressive tax mechanism.
Detailed explanation-2: -If a taxpayer earns more money and moves into a higher income level, marginal tax rates can significantly diminish the benefit of the additional income because it will be taxed at a higher rate.
Detailed explanation-3: -An increase in the rate of tax with an increase in income is called proportional tax.
Detailed explanation-4: -Your marginal tax rate corresponds to the highest tax bracket your last dollar of taxable income falls into. Your effective tax rate is the average rate of tax you pay on all of your income and is always lower than your marginal tax rate.