Daily Editorial Cloze Test Quiz – 2

Editorial Cloze Test Quiz

Taxes are of two kinds. A progressive tax can be an ______(1)_______of state policy, yielding benefits for the many at the expense of a few. But a tax can also be debilitating. A higher rate can sometimes be counterproductive, restricting the growth of the sector, and eventually resulting in lower revenues. With the introduction of the Goods and Services Tax, the Tamil Nadu film industry is squeezed on every side; in protest, cinema halls across the State have downed their shutters indefinitely. What is hurting is not the 28% GST on tickets priced above ₹100, or even the 30% levy ______(2)_______by local bodies as entertainment tax, but the fact that these come on top of the existing State government-imposed cap on ticket rates. The cap of ₹120 means that the exhibitors might earn more from their lease of cinema space to popcorn vendors than from screening the film. Indeed, given the differential rates, the exhibitor might not be able to earn much more from ______(3)_______₹120 for a ticket than he could from charging ₹99. Increasing tax rates while maintaining an overall price cap makes no sense at all. Governments are free to not incentivise certain services or forms of consumption. However, in this case, the end result of the squeeze on the margins of exhibitors and distributors is making the entire film industry ____(4)______. The price cap on tickets was sought to be justified on the ground that otherwise there would be exploitative premiums charged on keenly awaited films during the early days of their release, when demand runs high. It was ______(5)_______that this protected members of fan clubs of popular film stars, most of whom are from the lower social strata. But with the piling up of different taxes, it is the exhibitors who are at the wrong end of the exploitation.

Editorial Cloze Test Quiz

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