Inter-Class Incidence of Taxation in Farm and Non-Farm Sectors in India

and Non-Farm Sectors in India S L Shetty The existing differential in the tax burdens of farm and non-farm sectors may appear to follow from the difference between their inequality patterns. For, it may be argued that under progressive taxation the greater the inequality in income the larger the tax revenue earned by the State. But there is a false premise here. The prevailing systems of taxation in the farm and non-farm sectors are entirely different in nature and progressiveness. In fact, land revenue which is the principal direct tax on the farm sector is at best a proportional tax, whereas the income-tax on the non