Which of these best describes income tax?
- Regressive tax
- Indirect tax
- Direct tax
- Proportional tax
Answer:- The correct answer is “income tax is a direct tax”.
A direct tax is levied on a person, instruction or property, rather than on a transaction, that is the case of indirect taxes. Direct taxes are, for instance, income tax or property tax.
Income taxes are likewise progressive, since the % that each person requirements to pay is related to their income: the % increases when the income is larger. It the % increased for lower incomes it would be regressive. Proportional taxes found the same % for all taxpayers, regardless of their income.
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