| State may impose taxes for various reasons: the redistribution of income to eliminate the external economic effects. The impact of
taxes can be considered as micro-and macroeconomic levels. There are several opinions about the impact of taxes on the economy of the country, which range from the theoretical to the populist. Many scientists agree on the fact that different
types of taxes are very important tool in the economic life of any country.
Tax is an important component of modern economies. Countries those are oriented to a market closely monitoring its
tax policy and constantly adjusting it in line with the current state of affairs in the world economy. Taxes are compulsory
payments levied by the state to individuals and legal entities. Developed countries, like developing, using taxation as one of the main items of government revenue. Thus the state is interested to collect as much
taxes to replenish the budget and program performance. Some countries have a progressive income tax, which is not popular, especially among people with above-average affluence. At the same time the state gives people the right to reduce the amount of tax by entering the tax deductions. There is a huge range of legitimate ways to reduce
tax
payments. Such a policy leads to the fact that stimulated consumption in certain areas of the economy, which in turn leads to improved economic climate in the country. Income
tax may also be affecting the country's economic life. Lowering interest rates lead to the development of certain areas. The result of the introduction of new duties on the part of the state is falling consumption in the country, where buyers are forced to buy less of more expensive goods. Various researches have shown that proceeds from the introduction of fees at several times lower than the costs of buyers of the commodity. This situation is true for almost all indirect
taxes. International Trade Organization is actively fighting for free trade between countries and does not encourage entry of any new indirect
tax. The less
tax you pay the more disposable income for households for consumption. So, aggregate consumption and aggregate demand rising. Government reduces
taxes when they ran for stimulating economic policies, i.e. when the purpose of government is to lift the country out of the bottom of the economic cycle. Accordingly, the contractionary economic policy means raising
taxes to eliminate the overheating of the economy. Firms accept higher taxes as an extra cost, which leads to the fact that they reduce the supply of its product. Thus, the
tax rate is inversely proportional to the value of the aggregate supply. |
Taxmanshorror.com
Mandatory and non-refundable payment
Types of taxes
Function of the tax
The role of taxes in the economic life of any country |