Public Finance Tutor Date: 1. Would you move towards a consumption tax base, an income tax base, a combination? Tax policies are instruments utilized in levying taxes via imposition of different tariffs in order to apply the built policy…
On the other hand, income, tax deals with income from labor and capital. This means that the higher the level of income earned the higher the amount of taxation imposed. This system tends to reduce tax burden among low income earners, hence discouraging people to work hard. This is because capital taxation tends to discouraged savings among the members of the society (McCluskey et al pp.4-6). Additionally, income tax tends to discourage investments innovation. This in turns contributes to lower standards of living. On the contrary, consumption tax base, tend to eliminate saving barriers, leading to a more robust economy (McCluskey et al pp.4-5). Therefore, based on the above discussion, I would, prefer the consumption tax base having in mind that it is an indirect tax that people do not feel pitch of paying it. In addition, their benefit outweighs those of income tax based system (McCluskey et al, pp.4-5). 2. How do your proposals promote economic efficiency? Technical analyst asserts that, it is better to pay taxes when you spend it rather than when one makes it. This is because it helps at creating a level playing field, when properly constructed. For example, some necessities may be tax exempt or levied at a lower rate. In above connection, expenditure tax tends to bring underground economies to surface where everyone gets taxed. (McCluskey et al pp.4-5). ...
Whereby, the rich and the proletariats tend to have the same propensities. This implies that when proletariats reduce their consumption with a certain proportion, the rich increases their consumption with same proportion. In addition, consumption of low cost services and products tend to be heavily consumed as compared to expensive items (Alan.J and Auerbach pp.2-8). Connectively, the prices of ostentatious goods such; jewelries, fine wine, electronics and clothing are based on quality. Whereby when the prices of ostentatious goods increase their purchase increases progressively (Heathcote, Perri and Violante pp.4-5). 4. How do you weigh efficiency vs. equity? Efficiency is the optimal production and allocation of resources given the existing factors of production. Normally, it deals with future competence in the production of goods and services while strategizing at maximizing the total size of economic pie. On the contrary, equity refers to fairness and impartiality in distribution of wealth and economic resources. Therefore, efficiency is the economic pie, while equity is how that pie is sliced (Heathcote, perri and Violante, paras3-9). For example, if two firms with the same factors of production but one produces twenty percent goods more than the other, the firm with greater output will be considered to be more efficient because it tend to maximize resources (Heathcote, perri and Violante, paras3-9). On other contrary, equity focuses at ensuring fair distribution of wealth among the firm operating in the same industry. Additionally, greater economic equity may be achieved via provision of unemployment compensations benefits to the poor and dependent people. Connectively, high taxation tends to reduced efficiency substantially. This is ...
VAT was introduced to meet the increasing revenue requirements that could not be easily fulfilled by existing turnover taxes and France was the first to adopt VAT however, pace of adopting VAT increased and soon VAT became the requirement for entry to EU (International Tax Dialogue).
This paper will examine tax reforms in the US, discussing pertinent issues like corporate tax loopholes, benefits of corporate S status, gift tax laws and abolition of estate taxes. This paper shall provide alternatives to the federal system of taxation. Tax reforms are essential to the realization of corporate and national growth (Shapiro, 2005).
Individual shareholders paid tax at a rate of a minimum 15% on qualifying corporate dividends, and about 10 to 20% lower than them federal tax rate which is at times as high as 35%. Those taxpayers who are currently paying a marginal federal tan of 10 to 15% pay no taxes for qualifying dividends as well as any long-term capital gains.
While the politics primarily does the policy making job-both in terms of actual policy making and by giving directional impetus to policy making by other specialized agents of the State e.g. the Central Bank; it is the support bureaucracy of this polity which does the policy implementation job through its internecine presence in the concerned state.
Specifically, governments throughout the world are attempting to preserve incentives built into taxation to maximize economic efficiency. At the same time, these governments are trying to cope with the growth in social welfare programs throughout the past three decades.
Taxation acts as an effort to stabilize economy by the stabilization of price, wage, employment and balance of payments. Government efforts are made to secure an equitable distribution of income and wealth of the economy and last but not the least
ng into these taxes, we need to understand the records to be maintained for an ongoing business concern or a proprietorship concern for that matter getting converted to a company format. These include:
Formation of a company has major benefits in terms of liability of partners
At that point Toyota reviewed 14 million autos and trucks a year ago in light of flawed gas pedals and different issues. In a J.d. Power and Associates investigation of vehicle quality, it slipped to sixth place in
The meaning of efficiency would be to allocate resources in such a way so that market does not fail. Therefore; we would consider two main types of efficiencies, the productive efficiency and the parreto efficiency. Productive efficiency occurs when the economy is
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