Q.8 The income profile of three individuals is described below:

2015 20162017 2018 2019 2020 Total Income

Person A 80008000 8000 8000 8000 800048000

Person B4000 6000 13000 13000 4000 8000 48000

Person C | 3000 |3000 4000 | 40004500 [500048000

Person C also receives a windfall income of 24500 in 2019. The tax system is described as follows: The first 2500 Rs. are exempt from income tax. Then income up to Rs.7,500 is taxed @4%. Income between Rs.7500 and Rs.15,000 is taxed @9%. Income between Rs.15.000 and Rs.25.000 is taxed @ 12.5% while income above Rs.25.000 is taxed @ 15%.. Calculate the total (lifetime) tax liability of all persons. Is this tax system horizontally equitable? Is this tax regime regressive/progressive? Suggest some policy measures that the government may adopt in this scenario to make the lax system equitable?