alleryStart learning →Wealth tax, gift tax and estate duty were called 'paper taxes' because they
Awere collected only in paper form
Bnever raised much actual revenue
Capplied only to paper industries
Dwere levied on printed documents
Answer & Solution
Correct answer: B. never raised much actual revenue
1. These are direct taxes on wealth rather than income.
2. In practice they collected very little.
3. Because they existed on paper without yielding revenue, they were called **paper taxes**.
4. Estate duty has since been abolished, which underlines how marginal they were.
_Source: syllabus Introductory Macroeconomics, Ch 5 "Government Budget and the Economy", section 5.1.2 Classification of Receipts_
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