Question : What is the primary source of revenue for most governments?
Option 1: Income tax
Option 2: Sales tax
Option 3: Property tax
Option 4: Corporate tax
Correct Answer: Income tax
Solution : The correct answer is (a) Income tax
The primary source of revenue for most governments is income tax. Income tax is a tax imposed on individuals and businesses based on their earnings or profits. It is typically levied on various sources of income, including wages, salaries, self-employment income, rental income, investment income, and capital gains.
Income tax is a significant source of revenue because it captures a portion of the income earned by individuals and businesses within a country. Governments often use progressive tax systems, where individuals with higher incomes pay a higher tax rate, while those with lower incomes pay a lower tax rate or may be exempted from income tax altogether.
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