Advantages and disadvantages. The disadvantages are, firstly because of the increase in price, there will be a decrease in disposable income for smokers, this is because they will have to spend a greater portion of their earnings on the cigarettes. This causes a reduction in strands of livings. Secondly because Pennsylvania is surrounded by states with a smaller tax, smokers will leave the state and spend their money elsewhere, this could cause unemployment and poverty. Further reducing living standards.
It affects the distribution of real income, people on fixed incomes suffer as the purchasing power of their incomes decrease as price levels rise. Secondly, purchasing power od households on fixed income decline, as inflation tends to result in more unequal distribution of income as those on lower incomes find their wages do not rise as quickly as those on higher incomes. In times of high inflation household tend to purchase real assets that retain their real value since their prices rise faster than the inflation rate. Finally, another negative impact is the income tax earners suffer from fiscal drag pay rises to combat inflation put them into higher marginal tax brackets. This means as employees’ nominal wages increase with inflation their real wage (purchasing power of nominal wages) may remain constant.
The most commonly used method is the Gini coefficient, which can help to compare the level on inequality between countries. In order to reduce the inequality in the country, the government try to found some solutions. In the United States, an increase in minimum wage is one of the solutions to reduce the gap between rich and poor. Another issue is to tax more the wealthiest in the United States, this could help the poorest
In this way, the sale of products in world-wide market will increase. • Increased labor costs in China could take away the cost advantage of some Apple products. • Decaying middle-class incomes in some developed countries, including the United States, could shrink the potential market for higher-end consumer goods such as those marketed by Apple. • A strong U.S. dollar could increase exchange rates, making it more expensive for Apple to do business in key markets like Europe and
Opponent’s opinion is that minimum wage forces the employers to hire fewer employees because they have to pay more to their workers and the cost will increase. Other opponents say that it can increase the prices as businesses must raise their prices to adjust the higher wage and keep the profit stable. In 1995, the Congressional Joint Economic Committee published a review of 50 years of academic research on the minimum wage . The study found many negative impacts of increasing minimum wage, the findings include: reducing training for workers, increase job turnover, reducing school attendance, and encouraging employers to hire illegal workers. Also, because the minimum wage levels are different from one state to another, some states have higher minimum wage, some economists believe that this would have negative impacts on investments, as investors would like to invest their money in states with lower minimum wage to minimize the cost and to maximize the profit.
Our assumptions concerning client combine for this situation is that Sonance would drop the mass retail market client to signal they're centered solely on the custom and semi-custom installation markets. additionally, Sonance would think about reducing the worth of their Original Series Speakers to Dealers to $90 from $140. this might improve the Dealers' profit margin to seventy fifth, adequate SpeakerCraft's, though the margin web of installation prices would still be lower (see Exhibit 2). These assumptions would cause AN exaggerated Retention Rate through the Dealers sales of Original Series Speakers of eighty fifth and a better rate of 100 percent vs. 5%. Sonance would additionally increase their Retention Rate with Dealers for the present iPort product to eighty
When other factors constant (fixed). International conventions has led to lower tobacco prices, leading to increased demand for tobacco that will be used for the state to raise the tax on tobacco to avoid lower prices, which will lead to reduced demand for tobacco in spite of the presence of obstacles in
The supply curve S, shows that the supply of trade permits is perfectly inelastic and initially the demand of the permit is D1 at the price P1. But with the growing economy, it is necessary for the firms to produce, therefore the demand of the permits increase. Since the supply is inelastic, the price will also rise in the same proportion, thereby the firms is forced to reduces its pollution in order to avoid its expenses made to buy these permits. The other way, the government can force the firm to reduce its pollution emission is by increasing the marginal private cost of the producer to the level of marginal social cost. This is done by charging the tax by the firm on its output.
Employers may choose to lower the number of staff in order to still provide these benefits for employees, which would increase unemployment, or disband these programs yet keep their original number of employees. If these programs are disbanded, then the employees may have to look elsewhere for health care and this adds an added expense to their monthly salary. In this case, the higher minimum wage does not benefit but can rather harm employees as, often times, private health insurance is a much greater expense than the health insurance companies provide. Employers may also cut hours in order to still pay employees at the higher minimum wage but still not provide these benefits seeing as Federal Law does not require part-time employees to be provided health insurance or other benefits by their employers. This puts added strain on employees because, while earning more, they would be working less and would still need to purchase health insurance and other
Also, as indirect tax is a regressive tax, income inequality arises because most smokers fall in the category of low to middle income individuals. Another disadvantage is that the reduction of the consumption of cigarettes is low in the short run due to its low elasticity. However, the advantages of imposing indirect taxes are high government revenue which can be used to fund and promote merit goods. Also, greater reduction in smoking in the long run because elasticity increases in the long run as consumers have time to pick their
What do you do when you run out of gas in your car? Will you stop using your car? or Will you go to the gas station and refill your tank? Natural gas that has been pumped up from fracking nearly fuels 40% of the U.S. energy consumption. Without fracking, the price of gas would have a drastic raise from $3.25 to $11 per gallon, so consumers would have to pay about $130 or more to refill their gas tank.
Oil and gas companies use LIFO, much like the rest of the business world, to gain the tax benefit that LIFO provides. However, LIFO allows Chesapeake to record the cost of inventory at the most recent price paid- even though some of the inventory was purchased when oil was selling at a much lower price. Profits would then be understated for that particular year since LIFO would yield a higher cost of goods sold. Although it is legal to use LIFO as an accounting method for inventory Chesapeake could change the estimates and assumptions used to calculate LIFO balances and the LIFO reserve. Further changes to LIFO balances can exacerbate the effect that LIFO has on the income statement.
For example, after the BP oil spill the company 's stock value declined 34%, eliminating $96 billion of their company value. (Amadeo, 2015) Due to the lower supply and continued high demand, the price increases. Higher crude oil prices directly affect the cost of gasoline, home heating oil, manufacturing and electric power generation. (Amadeo, 2016)The increased cost impacts all Americans and the economy. However, companies claim that the economy can improve if there is an environmental disaster.
Armey also notes that “the tax code actually punishes savings and investment, by placing double or even triple tax burdens on capital. This lowers wages, destroys jobs, and depresses the living standards of all Americans.” The tax code needs to be reformed and a national sales tax is the best way to fix things. Although opponents may claim that it is regressive, the United States of America should reform its tax code by replacing income tax with sales tax because a national sales tax would cause our industry to grow, revolutionize our work force, and eliminate tax
Second, Reagan cut taxes for corporations and the wealthy-class. The theory of Reaganomics is tax relief for the rich would enable them to spend more money, save money in banks, and make investments. The additional spending from the rich, was supposed to help stimulate the economy and create new jobs. However, the opposite occurred and America suffered a deep recession in 1981-1982. In addition, the high interest rates caused the value of the dollar to rise on the international exchange market, thus American exports decreased and imports increased.