Title: Proportional Versus Progressive Taxation - Systems of Taxation - Proportional Principle of Tax - Progressive Principle of Tax - Definition and Explanation - Economicsconcepts.com
Headings: Proportional Versus Progressive Taxation:
Proportional Versus Progressive Taxation:
Systems of Taxation:
(1) Proportional Principle of Tax:
Definition and Explanation of Proportional Principle of Tax:
(2) Progressive Principle of Tax:
Definition and Explanation of Progressive Principle of Tax:
Arguments in Favor of Progressive Taxation:
Arguments Against Progressive Taxation:
Relevant Articles:

Content: (iv) Progressive taxation is advocated on the ground that -it entails less expenses on collection. The tax is economical because when the rate of tax increases with the increase in income, the money spent on administration and collection does not increase or if it at all increase, it does not increase in the same ratio. (v) Another merit claimed for the system of progressive taxation is that it conforms to the canon of elasticity. The state can easily increase its revenue by raising the tax rate. (vi) J.M. Keynes is of the opinion that if we want to achieve full employment in the country, then progressive taxation is an imperative necessity. Progressive taxation helps the state in reducing inequalities of income by transferring wealth from the rich to the poor. When the inequality in the distribution of wealth is reduced, the propensity of the nation to consume increases. The rise in. aggregate demand for goods and services stimulates investment and provides greater opportunities for employment. Arguments Against Progressive Taxation: