In this article we will discuss about the effects of excess burden of indirect taxes, explained with the help of suitable diagrams. While a sales tax is imposed on the sale of a product, an excise duty may be imposed on either on sale or the manufacture of a product. However, as far economic effects are concerned, they are the [...]
Let us learn about the merits and demerits of indirect tax. Merits of Indirect Tax: Indirect taxes have the following advantages: (a) Convenience: Indirect taxes are less inconvenient and burdensome to the taxpayer than the direct taxes. Since taxes are included in the price of the taxed commodity the taxpayer does not feel the burden of the taxes. It is [...]
Let us make an in-depth study of the merits and demerits of indirect taxes. (A) Merits: 1. Wide Coverage: The main merit of an indirect tax is that it touches all income groups. Direct tax, like income tax, is imposed on persons having a certain minimum level of income. People having income below that level are exempted from the payment [...]