Q5 of 11 Page 142

Ordinary food items, such as grain, pulses, oil are used by all. Then why is it said that imposing a tax on them will have a greater effect on the poor?

Poor are the people who are cannot afford the essential requirements of their life due to lack of income. When there is an imposition of tax on the ordinary food items, it will make the food item very costly. When the price the items are being increased it makes very difficult for the poor people to afford those things with their minimal income. The price rise will be affordable for the middle income and richer people because their income will be higher compared to the poor people income. This increase will adversely affect the lives of poor people.


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3

Match the following:

 4

You are expected to tax on steel, matches, clocks, cloth, iron; a tax increase on which of these would affect the prices of other commodities the most, and why?

 6

A group of four friends decided to stay together by contributing money towards the rent of a house. The rent was Rs.2000 per month.

a. How could this be shared among them?


b. We also know that two of them earned Rs.3000 per month and the other two Rs.7000 per month. Is there some other way of sharing the cost so that each one of them feels the same pinch?


c. Which way of sharing would you prefer and why?

 7

Tax on income or tax on commodities. Which of the two affects the rich more and which affects the poor more? Explain with reasons.