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: 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: The principle of progressive taxation which is the most popular and plausible theory of justice in taxation has not escaped criticism. The main objections leveled against this principle are as under: (i) In order to secure justice in taxation, it is very difficult to formulate a rational scheme of progression. The finance minister settles the degree of progression arbitrarily. As the rates of taxes are fixed on purely personal valuation, therefore, they may not lead to equal sacrifice.