Explain How Taxes Affect The Government Economic Policy

Converting to a flat tax system would mean everybody would give an equal percentage of their annual income earned for taxes. Now as this seems fair, is it really though? People who have lower incomes would obviously have a lot less money left over after the flat tax was collected. Another disadvantage of flat tax would be the loss of jobs. The IRS would be hit hard considering their line of work would be gone if the United States shifted to a flat tax system (Gordon

An example of a progressive tax is, of course, a personal state income tax. Therefore states that choose not to make use of an income tax cause an unreasonably large hardship on poorer individuals and families. One could also argue that because of this strain there is a greater need for state welfare because of the high unemployment and poverty rates, which could possibly be slightly lessened. Although a higher than average burden being placed on the poor is an important issue, I believe that the most important issue that needs to be addressed is the underfunding of public schools, especially in Texas. As discussed above, because the state does not get to reap the benefits of revenue brought in by an income tax, property and sales taxes remain almost at an all-time high in the majority of every state that lacks an income tax.

It also increase income inequality as the tax is fixed so the poor and the rich pay the same price. The advantages are higher government profit so the government can invest in merit goods and reduction of smokers in the long

Source: FCUK Annual Report Effects of monetary and fiscal policy towards FCUK Fiscal and monetary policies have great effect on French Connection Group Plc. and their activities. Fiscal policies are determined by the government and it is the amount of tax organization has to pay to government. If government increases the tax level, firms have less money to invest and recruit. Organization may charge more money to customers for their products and services.

I believe both theories can be used to the well-being of a nation and per scripture. To ignore the human suffering that was experienced during the depression would have been inhumane. The New Deal used debt to create lasting infrastructure and create segments of the industry that we still have today. When the economy is back on track and unemployment is at acceptable levels, the government needs to then turn its attention to using increased tax revenue to pay down debt rather than creating additional social programs that continue to grow government

In USA the revenues from gas taxes are used in many ways, for example, to reduce budget deficits, to decrease existing marginal tax rates (the rates on an additional dollar of income), or to offset the costs that gas tax would impose on certain groups of people. Raising the cost of using gas by imposing tax would increase the cost of producing goods and services such as electricity and transportation. Sometimes gas tax may have a negative effect on the economy. High price of goods and services can diminish the purchasing power of earnings of people and reduce their real wages, which would have an effect of reducing the amount of hours worked or goods produced by people, and therefore, decreasing the overall supply of labor, amount of money invested, further reducing total output of the country's economy.

The fiscal policy is primarily an instrument in the hands of the government whereby it estimates its revenues and expenditures in the economy. This is a very important tool as it would define the flow of money from different sources, indicating the level of activity in the economy. It also defines the broad policies of the government indicating the outwards flow of money in to different sectors of the economy to maintain the overall health of the economy and fulfill its social goals. Apart from the fiscal policy every country has monetary policy at its disposal.

Deregulation is the key to runaway equality and deregulation allowed it to happen (Leopold, p. 35). Lastly, reducing government social spending eliminated many safety net programs that aided and protected workers and families during tough economic times. The cutting of safety net programs does the exact opposite of what the Better Business Climate model promised. The model is supposed to bring renewed prosperity to the United States but it brought more inequality and stripped safety net programs that actually helped most Americans. This lack of assistance means that struggling people are struggling even more and they have less money to spend and to put back into the economy.

An increase in taxes, however, has not reduced the fares that always rise above official rates of inflation. The government imposed artificial structure on the privatization rail industry is one of the contributing factors to this increased taxpayer burden. Railways that are developed in private sectors have a high degree of integration. The privatization model includes one firm owning and mainlining the tracks, another operating the trains while another set of firms is leasing out the rolling stock while the industry is regulated by government agencies Thus the burden falls on the taxpayer.

history because the government cut taxes for rich Americans. Tax cuts mean that people would be able to keep more of their money instead of giving it to the government. Having more money on hand allows people to spend more. Some invested in stocks. United States History and New York History: Post-Civil War to the Present says that tax cuts would "give the wealthy an incentive to invest... the economy created new, better paying jobs.

Although Cliff may have valid business reasons to acquire the remaining shares of Quicksand, it is important to note that Quicksand’s considerable tax pools, losses, accumulated donations, and investment tax credits may be used to shelter the profits of RB E&P; thereby reducing tax revenues for the government. This is commonly referred to as “tax loss trading”. From Parliament’s perspective, it is evident that tax policy seeks to strike a balance of competing interests. On one end, the Income Tax Act (“Act”) seeks to limit or restrict the continued availability of unused tax deductions, losses, and credits. This objective flows logically that tax deductions, losses, and credits are personal to the taxpayer or the economic unit that earned them.

The best way would be to tax the rich further. Stopping the tax cuts for the rich is the first thing that needs to be done. We can’t just make big changes all of a sudden, but we need to start somewhere, taking away the tax cuts that are so often given to the rich is a good starting point. They don’t need these tax breaks, they’re rich! They can afford to make a little less money in exchange for bettering the lives of the poor in society.

Some claim the American economy would be better if left alone by the government, and if the government spent less tax dollars. Even so, the American economy has showed signs that it needs government intervention in order to succeed. America has programs that use tax dollars in attempt to benefit the majority of the country. Tax dollars can be used to provide federal aid to areas that are suffering from natural disaster, funding government agencies such as NASA, salaries for government employees, etc. The Department of Commerce studies how these tax dollars are used, and makes suggestions to the Executive Branch on how to spend their tax dollars to better benefit the country.

To try to fix the imbalances previously discussed, two main changes have been suggested: take more in and send less out. Currently Social Security is financed by a 12.4% tax on wages and salary, up to $118,500. The ‘take more in’ approach would be executed by raising the tax by 2.9% or removing the cap to close the funding gap. The ‘send out less’ approach is the less accepted approach, because it is seen as more beneficial to those with higher incomes. The main focus of this approach is getting people to retire later, but people with higher incomes enjoy higher life expectancies.

These benefits would be only be available to the lower and middle class, leaving the rich without benefits, thus creating income equality. This is not the only time the rich will not receive benefits, but the poor will as Krugman says an increased minimum wage will raise the social status of the poor. Raising of the minimum wage, at the time when the article was written, would allow the lower classes to bring in an increased income annually. The rich are then forced to pay their workers more, which means less money for the wealthy annually. This means the poor would make more money, the middle class would stay the same, and the rich would make less annually, therefore bringing income equality.