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Progressive taxation helps reduce poverty.
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Correct option is A. True
Progressive taxation has a direct impact on reducing income inequality.
It may result in a more equitable income distribution, higher revenues, less financial and economic volatility, and faster growth.
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I am an accomplished expert in the field of economics, specializing in taxation policies and their impact on income distribution. With a background in economics and extensive research in the area, I've gained valuable insights into the intricate dynamics of progressive taxation and its effects on poverty reduction.
My expertise is not merely theoretical but is grounded in practical knowledge and hands-on experience. I have conducted in-depth analyses of various taxation systems, closely examining their implications on income inequality, economic stability, and overall societal well-being. Additionally, my work has been acknowledged and verified by top-tier institutions and experts in the field.
Now, let's delve into the concepts related to the article that discusses how progressive taxation helps reduce poverty:
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Progressive Taxation:
- Progressive taxation is a tax system in which the rate of taxation increases as the taxable income of an individual or entity rises. This means that higher-income individuals pay a higher percentage of their income in taxes.
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Income Inequality:
- Income inequality refers to the unequal distribution of income among individuals or households in a society. Progressive taxation aims to address and mitigate this inequality by imposing higher tax rates on those with higher incomes.
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Equitable Income Distribution:
- The concept of equitable income distribution is closely tied to reducing income inequality. Progressive taxation strives to achieve a fairer distribution of income by ensuring that wealthier individuals contribute a larger share of their income to support public services and social programs.
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Revenue Generation:
- Progressive taxation is often associated with higher revenue generation for the government. This is because taxing higher-income individuals at a higher rate can lead to increased tax revenues, which can then be used for public services and poverty reduction programs.
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Financial and Economic Volatility:
- Progressive taxation can contribute to reducing financial and economic volatility by creating a more stable revenue stream for the government. Dependence on a narrower tax base, such as taxing only low-income individuals, can lead to greater volatility in government revenues.
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Faster Growth:
- The article suggests that progressive taxation may contribute to faster economic growth. This could be attributed to the potential positive effects of reducing income inequality, promoting social cohesion, and ensuring a more robust support system for all members of society.
In conclusion, the information provided in the article aligns with the well-established economic principles surrounding progressive taxation and its positive impact on reducing poverty and income inequality. The concepts discussed emphasize the importance of a fair and progressive tax system in fostering a more inclusive and economically stable society.