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Consider the following statements.
1. If not converted into proportional taxes, every progressive tax will go on increasing and similarly every regressive tax will decrease to zero, becoming ultimately futile tax methods.
2. That is why every tax, be it progressive or regressive, must be converted into proportional taxes after a certain level.
Which of these statements is/are incorrect?
- a)1 only
- b)2 Only
- c)None of them
- d)Both 1 and 2
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
Consider the following statements.1. If not converted into proportiona...
Based on the analysis of the given statements:
If not converted into proportional taxes, every progressive tax will go on increasing and similarly every regressive tax will decrease to zero, becoming ultimately futile tax methods.
This statement is incorrect. Progressive taxes are designed to increase with income, but they typically have caps or thresholds beyond which the rate does not increase. They do not continue increasing indefinitely. Similarly, regressive taxes do not decrease to zero; they take a smaller percentage of income as income increases, but the amount of tax paid can still increase as income increases.
That is why every tax, be it progressive or regressive, must be converted into proportional taxes after a certain level.
This statement is also incorrect. There is no requirement or principle in tax policy that mandates converting progressive or regressive taxes into proportional taxes after a certain level. Each type of tax serves different policy objectives, and their structures are maintained to achieve those objectives.
Conclusion:
Both statements are incorrect.
The correct answer is:
4. Both 1 and 2
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Most Upvoted Answer
Consider the following statements.1. If not converted into proportiona...
Taxation and its Types
Taxation is the process of imposing a financial charge or levy on individuals or legal entities by the government. It is an important source of revenue for the government to finance its expenditure. There are various types of taxes, such as income tax, sales tax, excise tax, property tax, etc. based on their incidence and impact on the taxpayers.
Progressive, Regressive, and Proportional Taxes
The three primary types of taxes are progressive, regressive, and proportional taxes. Each of them has its own characteristics and impact on the taxpayers.
1. Progressive Taxes: Progressive taxes are those in which the tax rate increases as the taxable income of the taxpayer increases. The objective of this type of tax is to redistribute wealth from the rich to the poor. The income tax is an example of a progressive tax.
2. Regressive Taxes: Regressive taxes are those in which the tax rate decreases as the taxable income of the taxpayer increases. This type of tax is considered unfair as the poor have to pay a higher percentage of their income as taxes than the rich. Sales tax is an example of a regressive tax.
3. Proportional Taxes: Proportional taxes are those in which the tax rate remains the same for all taxpayers, irrespective of their income level. This type of tax is considered fair as everyone pays the same percentage of their income as taxes. Property tax is an example of a proportional tax.
Conversion of Taxes
1. Statement 1: If not converted into proportional taxes, every progressive tax will go on increasing, and similarly, every regressive tax will decrease to zero, becoming ultimately futile tax methods.
This statement is incorrect. The statement is partially correct in the case of regressive taxes but incorrect in the case of progressive taxes. Regressive taxes become futile as the tax rate decreases to zero, but progressive taxes remain effective as the tax rate keeps increasing as the income of the taxpayer increases.
2. Statement 2: That is why every tax, be it progressive or regressive, must be converted into proportional taxes after a certain level.
This statement is also incorrect. Converting every tax into a proportional tax is not feasible as it would not serve the objective of taxation, which is to redistribute wealth and promote social welfare. Proportional taxes do not take into account the ability to pay of the taxpayers, and hence, they are not suitable for achieving the objective of taxation.
Conclusion
Therefore, the correct answer is option D, None of them. Both the statements are incorrect as they do not consider the objective and impact of taxation. The government has to choose the appropriate type of tax based on its objectives and the impact on the taxpayers to achieve the desired outcomes.
Taxation is the process of imposing a financial charge or levy on individuals or legal entities by the government. It is an important source of revenue for the government to finance its expenditure. There are various types of taxes, such as income tax, sales tax, excise tax, property tax, etc. based on their incidence and impact on the taxpayers.
Progressive, Regressive, and Proportional Taxes
The three primary types of taxes are progressive, regressive, and proportional taxes. Each of them has its own characteristics and impact on the taxpayers.
1. Progressive Taxes: Progressive taxes are those in which the tax rate increases as the taxable income of the taxpayer increases. The objective of this type of tax is to redistribute wealth from the rich to the poor. The income tax is an example of a progressive tax.
2. Regressive Taxes: Regressive taxes are those in which the tax rate decreases as the taxable income of the taxpayer increases. This type of tax is considered unfair as the poor have to pay a higher percentage of their income as taxes than the rich. Sales tax is an example of a regressive tax.
3. Proportional Taxes: Proportional taxes are those in which the tax rate remains the same for all taxpayers, irrespective of their income level. This type of tax is considered fair as everyone pays the same percentage of their income as taxes. Property tax is an example of a proportional tax.
Conversion of Taxes
1. Statement 1: If not converted into proportional taxes, every progressive tax will go on increasing, and similarly, every regressive tax will decrease to zero, becoming ultimately futile tax methods.
This statement is incorrect. The statement is partially correct in the case of regressive taxes but incorrect in the case of progressive taxes. Regressive taxes become futile as the tax rate decreases to zero, but progressive taxes remain effective as the tax rate keeps increasing as the income of the taxpayer increases.
2. Statement 2: That is why every tax, be it progressive or regressive, must be converted into proportional taxes after a certain level.
This statement is also incorrect. Converting every tax into a proportional tax is not feasible as it would not serve the objective of taxation, which is to redistribute wealth and promote social welfare. Proportional taxes do not take into account the ability to pay of the taxpayers, and hence, they are not suitable for achieving the objective of taxation.
Conclusion
Therefore, the correct answer is option D, None of them. Both the statements are incorrect as they do not consider the objective and impact of taxation. The government has to choose the appropriate type of tax based on its objectives and the impact on the taxpayers to achieve the desired outcomes.
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Consider the following statements.1. If not converted into proportional taxes, every progressive tax will go on increasing and similarly every regressive tax will decrease to zero, becoming ultimately futile tax methods.2. That is why every tax, be it progressive or regressive, must be converted into proportional taxes after a certain level.Which of these statements is/are incorrect?a)1 onlyb)2 Onlyc)None of themd)Both 1 and 2Correct answer is option 'D'. Can you explain this answer?
Question Description
Consider the following statements.1. If not converted into proportional taxes, every progressive tax will go on increasing and similarly every regressive tax will decrease to zero, becoming ultimately futile tax methods.2. That is why every tax, be it progressive or regressive, must be converted into proportional taxes after a certain level.Which of these statements is/are incorrect?a)1 onlyb)2 Onlyc)None of themd)Both 1 and 2Correct answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements.1. If not converted into proportional taxes, every progressive tax will go on increasing and similarly every regressive tax will decrease to zero, becoming ultimately futile tax methods.2. That is why every tax, be it progressive or regressive, must be converted into proportional taxes after a certain level.Which of these statements is/are incorrect?a)1 onlyb)2 Onlyc)None of themd)Both 1 and 2Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements.1. If not converted into proportional taxes, every progressive tax will go on increasing and similarly every regressive tax will decrease to zero, becoming ultimately futile tax methods.2. That is why every tax, be it progressive or regressive, must be converted into proportional taxes after a certain level.Which of these statements is/are incorrect?a)1 onlyb)2 Onlyc)None of themd)Both 1 and 2Correct answer is option 'D'. Can you explain this answer?.
Consider the following statements.1. If not converted into proportional taxes, every progressive tax will go on increasing and similarly every regressive tax will decrease to zero, becoming ultimately futile tax methods.2. That is why every tax, be it progressive or regressive, must be converted into proportional taxes after a certain level.Which of these statements is/are incorrect?a)1 onlyb)2 Onlyc)None of themd)Both 1 and 2Correct answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements.1. If not converted into proportional taxes, every progressive tax will go on increasing and similarly every regressive tax will decrease to zero, becoming ultimately futile tax methods.2. That is why every tax, be it progressive or regressive, must be converted into proportional taxes after a certain level.Which of these statements is/are incorrect?a)1 onlyb)2 Onlyc)None of themd)Both 1 and 2Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements.1. If not converted into proportional taxes, every progressive tax will go on increasing and similarly every regressive tax will decrease to zero, becoming ultimately futile tax methods.2. That is why every tax, be it progressive or regressive, must be converted into proportional taxes after a certain level.Which of these statements is/are incorrect?a)1 onlyb)2 Onlyc)None of themd)Both 1 and 2Correct answer is option 'D'. Can you explain this answer?.
Solutions for Consider the following statements.1. If not converted into proportional taxes, every progressive tax will go on increasing and similarly every regressive tax will decrease to zero, becoming ultimately futile tax methods.2. That is why every tax, be it progressive or regressive, must be converted into proportional taxes after a certain level.Which of these statements is/are incorrect?a)1 onlyb)2 Onlyc)None of themd)Both 1 and 2Correct answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for UPSC.
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