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Indexing income tax for inflation

Publication Type : Journal Article

Publisher : New Delhi Publishers

Source : Economic Affairs (September Issue), New Delhi Publishers (1974)

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Campus : Amritapuri

School : Department of Management, School of Business

Center : Amrita Center for Economics & Governance (ACEG)

Department : Department of Management

Year : 1974

Abstract : Doring the period of rising prioeB, income tax paJers are put to a higher tax burden owing to interaction of loBation and a progressive tax schedule. On 'he one hand, the increase in income (money or real) puahee a portion of the income into the higher income brackets aubjeo$ to higher marginal tax ra'-, on the other, the rise in price leads to eroaion in purchasing power. If the price level is relatively atable, increase in money income and subeequent increase in tax liability may be juetified on the groUDd of increased ability to pay. But during the rleiog prioea, the riBe in tax burden may or may not be in oonformi$y with 'be rille in real inoome creating $hereby p088ibi·litlee of injllBtioe in taxauon.

Cite this Research Publication : Shyam Nath, “Indexing income tax for inflation”, Economic Affairs (September Issue), 1974.

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