Question

2. Write the following short notes with examples and graphics presentation.

a) Progressive taxes and proportional taxes.

b) Regressive taxes and digressive taxes.

Answer 1

Progressive taxes- When a tax takes a higher percentage of tax from people with higher incomes. It means that the more a person earns, the higher his average rate of tax will be.Progressive taxes are imposed in an attempt to reduce the tax incidence of people with a lower ability-to-pay, as such taxes shift the incidence increasingly to those with a higher ability-to-pay

EXAMPLE if your annual income is 1million than tax rate is 25% but if your income is incresed to 2million the tax rate also increased to 30% and so on

this is show if your income increase than tax rate also incease..........

proportional taxes= A proportional tax, also called a flat tax, is an income taxation system where every taxpayer is subject to the same tax rate regardless of income level or status.

example...if a citizen salery is .5million than tax rate is 10% when increased to 1 million that tax rate also increased n same ration to 15% and so on...........this graph also represent same.how the ration of tax and income is same

Regressive taxes= when they impose a harsher burden on the poor than on the rich. In poor families, a larger proportion of their income pays for shelter, food, and transportation. Any tax decreases their ability to afford these basics.

example when our income is 1 million tha tax rate is 30% but when tha salary increased to 2 million the tax rate came upto 10% and than soo on,...........

Digressive taxes-Digressive tax is a mix of between the progressive tax and proportional tax. In the case of digressive tax, the tax rate is increased firstly with increase in income and then, the rate remains flat or constant with further increase in income.

example..when a taxpayer salary is increase as per proportional bases but on a point the tax rate is fix.in this bar graph you can see that upto 4million the salery is increase as pr proportional bases but after than it will fix a single tax rate 35%..

thank you.....