After reading this article you will learn about the arguments in favour and against proportional taxation. Arguments in Favour of Proportional Taxation: Proportional taxation has been advocated by the classical economists as a protest against the injustice of the old system of exemptions and privileges. Adam Smith, stating that taxation should be adjusted to the abilities of the subjects, adds [...]
After reading this article you will learn about the merits and demerits of progressive taxation. Merits of Progressive Taxation: Progressive taxation has been universally accepted as the best system of taxation. It is based on the application of principle of diminishing marginal utility of income and ability to pay. As income increases, marginal utility of income diminishes. Also, the higher [...]
This article throws light upon the twelve main factors determining the incidence and shifting of tax. The factors are: 1. Elasticity of Demand 2. Elasticity of Supply 3. Price acts an Engine of Shifting 4. Tax Area 5. Time Period 6. Coverage of Tax 7. Availability of Substitutes 8. Nature of Demand for Commodities 9. Business Conditions 10. Types of [...]