Q. Consider the following:

1. The burden of a progressive tax is in same proportion of income for all households
2. The progressive tax structure is generally considered to increase equality
3. The more the income, more one has to pay a progressive tax

Which of the above statements is / are correct?
Answer: Only 2 and 3
Notes: Statement 1 is incorrect as a progressive tax implies a higher percentage of tax on higher incomes, not the same for all. Statements 2 and 3 are correct: progressive taxes tend to reduce income inequality and require those with more income to pay higher taxes. Option 3 correctly represents the set of true statements.