Question : Which type of tax acts as an automatic stabiliser in the economy?
Option 1: Professional tax
Option 2: Wealth tax
Option 3: Capital gains tax
Option 4: Proportional income tax
Correct Answer: Proportional income tax
Solution : The correct option is Proportional income tax .
Proportional income tax is regarded as the automatic stabiliser in the economy because all individuals or entities pay the same percentage of their income in taxes, regardless of their income level. There are no tax brackets.
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