Given statements with companying given scenario. Concept Introduction: Progressive Tax: Progressive tax is a type of tax under which the taxpayers with higher incomes are charged with higher income tax. Proportional Tax: Proportional tax is a type of tax under which, the tax rate remains the same irrespective of the fact whether the tax payer earns high income or low income. Regressive Tax: Regressive tax is a type of tax under which, the tax is charged in such a way that the tax rate gets lower as the income gets higher. Benefits Principle: The benefits principle of taxation is the principle under which the person who earns the benefit is liable to pay taxes for the amount of benefit earned. Ability-to-pay Principle: The ability-to-pay principle is the principle of taxation under which the burden of tax is laid according to a person’s ability to pay. The persons with higher incomes are liable to pay higher taxes.

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Chapter 7, Problem 12P

To determine

Given statements with companying given scenario.

Concept Introduction:

Progressive Tax: Progressive tax is a type of tax under which the taxpayers with higher incomes are charged with higher income tax.

Proportional Tax: Proportional tax is a type of tax under which, the tax rate remains the same irrespective of the fact whether the tax payer earns high income or low income.

Regressive Tax: Regressive tax is a type of tax under which, the tax is charged in such a way that the tax rate gets lower as the income gets higher.

Benefits Principle: The benefits principle of taxation is the principle under which the person who earns the benefit is liable to pay taxes for the amount of benefit earned.

Ability-to-pay Principle: The ability-to-pay principle is the principle of taxation under which the burden of tax is laid according to a person’s ability to pay. The persons with higher incomes are liable to pay higher taxes.

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