Question
Distinguish between Progressive and Proportional taxation.

Answer

Difference between :
Progressive TaxationProportional Taxation
1. Under it, the rate of tax increases with the rise in tax payer's income as the tax base increases.1. Under it, the rate of tax remains constant as the tax base changes.
2. It is more equitable as it falls heavily on higher incomes.2. It is inequitable as it falls heavily on the poor.

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