Detailed Explanation:

✅ Statement 1 – Correct: A decrease in tax-to-GDP ratio often indicates slowing economic growth, as lower incomes and profits reduce tax collections, or reflects economic contraction where tax revenues fall faster than GDP.

❌ Statement 2 – Incorrect: The tax-to-GDP ratio measures government revenue collection efficiency, not income distribution equity. A decreasing ratio could occur with progressive tax cuts benefiting all income groups, or with regressive taxes declining – it provides no direct information about income inequality or distribution patterns.