February 26, 2016 No.3
https://www.facebook.com/mehtarahulc/posts/10153308055506922
https://www.facebook.com/mehtarahulc/posts/10153308055506922
Comparing two tax proposals --- comparing regressiveness wrt income / wealth
.
In taxation,,there is often a case of EQUIVALENT TAX. i.e. one has two options --- apply tax rate of say x% on A or apply tax rate of y% on B. And both give equal amount of tax collection. Then which of the two is less bad?
.
eg consider following two tax proposals
.
(A) tax of Rs 100 per liter on petrol , Rs 10 per kg on coal ., Rs 10 per unit of electricity etc i.e. heavy fuel tax
.
(B) income tax of 30% on income
.
Say BOTH give same amount of tax revenue
.
Then which in YOUR opinion is less bad?
.
In taxation,,there is often a case of EQUIVALENT TAX. i.e. one has two options --- apply tax rate of say x% on A or apply tax rate of y% on B. And both give equal amount of tax collection. Then which of the two is less bad?
.
eg consider following two tax proposals
.
(A) tax of Rs 100 per liter on petrol , Rs 10 per kg on coal ., Rs 10 per unit of electricity etc i.e. heavy fuel tax
.
(B) income tax of 30% on income
.
Say BOTH give same amount of tax revenue
.
Then which in YOUR opinion is less bad?
Hint : which one is less regressive?
..
I use words "less bad" and better, because all taxes at the end of the day appear as bad.
..
I use words "less bad" and better, because all taxes at the end of the day appear as bad.
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