CA Foundation Exam > CA Foundation Questions > The burden of tax lies more/equally on ______...
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The burden of tax lies more/equally on ______ in a regressive taxation system.
- a)poor class
- b)rich class
- c)midddle class
- d)all of these
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
The burden of tax lies more/equally on ______ in a regressive taxation...
Regressive Taxation System
- A regressive taxation system is one where the tax rate decreases as the taxable income increases.
- Under this system, the burden of tax is higher on lower-income groups, as they are required to pay a larger percentage of their income as taxes compared to higher-income groups.
The Burden of Tax in a Regressive Taxation System
- Poor class: The burden of tax lies more on the poor class in a regressive taxation system. This is because poor individuals pay a higher percentage of their income in taxes, which can lead to financial strain and limit their ability to meet basic needs.
- Rich class: The burden of tax is comparatively lower on the rich class, as they pay a smaller percentage of their income in taxes. This can lead to wealth accumulation and contribute to income inequality.
- Middle class: The burden of tax on the middle class is also relatively lower compared to the poor class but higher than the rich class. This can result in the middle class bearing a higher tax burden than they would under a progressive taxation system.
Conclusion
Under a regressive taxation system, the burden of tax lies more on the poor class, leading to negative impacts on their financial well-being and contributing to income inequality. In contrast, the rich class experiences a lower tax burden, allowing them to accumulate wealth more easily.
Most Upvoted Answer
The burden of tax lies more/equally on ______ in a regressive taxation...
Regressive Taxation System
- A regressive taxation system is one where the tax rate decreases as the taxable income increases.
- Under this system, the burden of tax is higher on lower-income groups, as they are required to pay a larger percentage of their income as taxes compared to higher-income groups.
The Burden of Tax in a Regressive Taxation System
- Poor class: The burden of tax lies more on the poor class in a regressive taxation system. This is because poor individuals pay a higher percentage of their income in taxes, which can lead to financial strain and limit their ability to meet basic needs.
- Rich class: The burden of tax is comparatively lower on the rich class, as they pay a smaller percentage of their income in taxes. This can lead to wealth accumulation and contribute to income inequality.
- Middle class: The burden of tax on the middle class is also relatively lower compared to the poor class but higher than the rich class. This can result in the middle class bearing a higher tax burden than they would under a progressive taxation system.
Conclusion
Under a regressive taxation system, the burden of tax lies more on the poor class, leading to negative impacts on their financial well-being and contributing to income inequality. In contrast, the rich class experiences a lower tax burden, allowing them to accumulate wealth more easily.
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The burden of tax lies more/equally on ______ in a regressive taxation...
Write the most appropriate answer from the given options in respect of the following :
Which one of the following is not used in the measurement of trend –
Which one of the following is not used in the measurement of trend –
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