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Which of the following statements are correct?
1. Ability to pay the principal of taxation holds that the amount of taxes people pay should relate to their income or wealth
2. The Benefit Principle of taxation states that individuals should be taxed in proportion to the benefit they receive from Government programmes
3. A progressive tax takes a larger share of tax from poor families than it does from rich families
4. Indirect taxes have the advantage of being cheaper and easier to collect
1. Ability to pay the principal of taxation holds that the amount of taxes people pay should relate to their income or wealth
2. The Benefit Principle of taxation states that individuals should be taxed in proportion to the benefit they receive from Government programmes
3. A progressive tax takes a larger share of tax from poor families than it does from rich families
4. Indirect taxes have the advantage of being cheaper and easier to collect
Select the correct answer using the code given below:
- a)1 and 3 only
- b)2 and 4 only
- c)1, 2 and 4 only
- d)1, 2, 3 and 4
Correct answer is option 'B'. Can you explain this answer?
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Verified Answer
Which of the following statements are correct?1. Ability to pay the pr...
- Tax is a mandatory financial implication on the taxpayer by the Government to collectively meet the public expenditure.
- Individuals who earn more are required to pay more tax to the government than individuals who earn less. This is the ability to pay taxation.
- Benefits received Principle states that the tax to be paid should be directly proportional to the number of benefits being received from the use of public services and goods that are provided by the government.
- Progressive Tax: Lower tax rate is imposed on fewer income earners and the higher tax rate is imposed on more income earners. Hence, the average tax rate increases as the taxable amount increases.
- Direct Tax is a tax that is directly paid to the government by the taxpayer. Indirect tax is usually imposed on a manufacturer or supplier who then passes on the tax to the consumer.
Most Upvoted Answer
Which of the following statements are correct?1. Ability to pay the pr...
Statement 1: Ability to pay the principal of taxation holds that the amount of taxes people pay should relate to their income or wealth.
This statement is correct. The ability to pay principle of taxation suggests that individuals who have higher incomes or greater wealth should pay a larger amount of taxes compared to those with lower incomes or lesser wealth. The idea behind this principle is that those who are more financially capable have a greater ability to contribute to the funding of government activities and programs.
Statement 2: The Benefit Principle of taxation states that individuals should be taxed in proportion to the benefit they receive from Government programmes.
This statement is incorrect. The benefit principle of taxation suggests that individuals should be taxed in proportion to the benefits they receive from government programs. This means that those who benefit more from government services or programs should pay a larger amount of taxes. However, this principle is not widely used in practice and is often seen as difficult to implement.
Statement 3: A progressive tax takes a larger share of tax from poor families than it does from rich families.
This statement is correct. A progressive tax system is one in which the tax rate increases as the income or wealth of the taxpayer increases. In this system, higher-income individuals or families are required to pay a larger share of their income in taxes compared to those with lower incomes. Therefore, a progressive tax system takes a larger share of tax from poor families than it does from rich families.
Statement 4: Indirect taxes have the advantage of being cheaper and easier to collect.
This statement is correct. Indirect taxes are taxes that are levied on goods and services rather than directly on individuals or their income. These taxes are often included in the price of the goods or services and are collected by businesses or vendors. Indirect taxes, such as sales taxes or value-added taxes, are generally considered to be cheaper and easier to collect compared to direct taxes, which require individuals or businesses to report and pay taxes on their income or wealth.
This statement is correct. The ability to pay principle of taxation suggests that individuals who have higher incomes or greater wealth should pay a larger amount of taxes compared to those with lower incomes or lesser wealth. The idea behind this principle is that those who are more financially capable have a greater ability to contribute to the funding of government activities and programs.
Statement 2: The Benefit Principle of taxation states that individuals should be taxed in proportion to the benefit they receive from Government programmes.
This statement is incorrect. The benefit principle of taxation suggests that individuals should be taxed in proportion to the benefits they receive from government programs. This means that those who benefit more from government services or programs should pay a larger amount of taxes. However, this principle is not widely used in practice and is often seen as difficult to implement.
Statement 3: A progressive tax takes a larger share of tax from poor families than it does from rich families.
This statement is correct. A progressive tax system is one in which the tax rate increases as the income or wealth of the taxpayer increases. In this system, higher-income individuals or families are required to pay a larger share of their income in taxes compared to those with lower incomes. Therefore, a progressive tax system takes a larger share of tax from poor families than it does from rich families.
Statement 4: Indirect taxes have the advantage of being cheaper and easier to collect.
This statement is correct. Indirect taxes are taxes that are levied on goods and services rather than directly on individuals or their income. These taxes are often included in the price of the goods or services and are collected by businesses or vendors. Indirect taxes, such as sales taxes or value-added taxes, are generally considered to be cheaper and easier to collect compared to direct taxes, which require individuals or businesses to report and pay taxes on their income or wealth.
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Which of the following statements are correct?1. Ability to pay the principal of taxation holds that the amount of taxes people pay should relate to their income or wealth2. The Benefit Principle of taxation states that individuals should be taxed in proportion to the benefit they receive from Government programmes3. A progressive tax takes a larger share of tax from poor families than it does from rich families4. Indirect taxes have the advantage of being cheaper and easier to collectSelect the correct answer using the code given below:a)1 and 3 onlyb)2 and 4 onlyc)1, 2 and 4 onlyd)1, 2, 3 and 4Correct answer is option 'B'. Can you explain this answer?
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Which of the following statements are correct?1. Ability to pay the principal of taxation holds that the amount of taxes people pay should relate to their income or wealth2. The Benefit Principle of taxation states that individuals should be taxed in proportion to the benefit they receive from Government programmes3. A progressive tax takes a larger share of tax from poor families than it does from rich families4. Indirect taxes have the advantage of being cheaper and easier to collectSelect the correct answer using the code given below:a)1 and 3 onlyb)2 and 4 onlyc)1, 2 and 4 onlyd)1, 2, 3 and 4Correct answer is option 'B'. Can you explain this answer? for Defence 2024 is part of Defence preparation. The Question and answers have been prepared according to the Defence exam syllabus. Information about Which of the following statements are correct?1. Ability to pay the principal of taxation holds that the amount of taxes people pay should relate to their income or wealth2. The Benefit Principle of taxation states that individuals should be taxed in proportion to the benefit they receive from Government programmes3. A progressive tax takes a larger share of tax from poor families than it does from rich families4. Indirect taxes have the advantage of being cheaper and easier to collectSelect the correct answer using the code given below:a)1 and 3 onlyb)2 and 4 onlyc)1, 2 and 4 onlyd)1, 2, 3 and 4Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for Defence 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statements are correct?1. Ability to pay the principal of taxation holds that the amount of taxes people pay should relate to their income or wealth2. The Benefit Principle of taxation states that individuals should be taxed in proportion to the benefit they receive from Government programmes3. A progressive tax takes a larger share of tax from poor families than it does from rich families4. Indirect taxes have the advantage of being cheaper and easier to collectSelect the correct answer using the code given below:a)1 and 3 onlyb)2 and 4 onlyc)1, 2 and 4 onlyd)1, 2, 3 and 4Correct answer is option 'B'. Can you explain this answer?.
Which of the following statements are correct?1. Ability to pay the principal of taxation holds that the amount of taxes people pay should relate to their income or wealth2. The Benefit Principle of taxation states that individuals should be taxed in proportion to the benefit they receive from Government programmes3. A progressive tax takes a larger share of tax from poor families than it does from rich families4. Indirect taxes have the advantage of being cheaper and easier to collectSelect the correct answer using the code given below:a)1 and 3 onlyb)2 and 4 onlyc)1, 2 and 4 onlyd)1, 2, 3 and 4Correct answer is option 'B'. Can you explain this answer? for Defence 2024 is part of Defence preparation. The Question and answers have been prepared according to the Defence exam syllabus. Information about Which of the following statements are correct?1. Ability to pay the principal of taxation holds that the amount of taxes people pay should relate to their income or wealth2. The Benefit Principle of taxation states that individuals should be taxed in proportion to the benefit they receive from Government programmes3. A progressive tax takes a larger share of tax from poor families than it does from rich families4. Indirect taxes have the advantage of being cheaper and easier to collectSelect the correct answer using the code given below:a)1 and 3 onlyb)2 and 4 onlyc)1, 2 and 4 onlyd)1, 2, 3 and 4Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for Defence 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statements are correct?1. Ability to pay the principal of taxation holds that the amount of taxes people pay should relate to their income or wealth2. The Benefit Principle of taxation states that individuals should be taxed in proportion to the benefit they receive from Government programmes3. A progressive tax takes a larger share of tax from poor families than it does from rich families4. Indirect taxes have the advantage of being cheaper and easier to collectSelect the correct answer using the code given below:a)1 and 3 onlyb)2 and 4 onlyc)1, 2 and 4 onlyd)1, 2, 3 and 4Correct answer is option 'B'. Can you explain this answer?.
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