Income tax is classified as: (find the exception)*1 pointnational taxindirect taxexcsie taxprogressive tax
Question
Income tax is classified as: (find the exception)
1 point
- national tax
- indirect tax
- excise tax
- progressive tax
Solution
The exception in the list is "indirect tax". Here's why:
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National tax: Income tax is a form of national tax, as it is imposed by the national government on the income earned by individuals and corporations.
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Indirect tax: This is the exception. Income tax is a direct tax, not an indirect tax. Direct taxes are paid directly to the government by the person on whom it is imposed, while indirect taxes are collected by an intermediary from the person who bears the ultimate economic burden of the tax.
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Excise tax: While income tax is not an excise tax, both are types of taxes. Excise taxes are taxes paid when purchases are made on a specific good or service, like gasoline.
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Progressive tax: Income tax is a progressive tax, as the tax rate increases as the taxable amount increases. The more money you make, the higher percentage of tax you pay.
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