Concept of taxation, Macroeconomics

The Concept of Taxation is explained below:

Taxes are the general purpose, compulsory contributions by people to the public treasury (or national exchequer) to meet the expenditure requirements of the government. Without charging the taxes, the government would not be able to deliver services like law and order, national defence public administration, free or subsidized health and education etc.

As the taxes interfere with market mechanism, they are considered distortionary, and as such there is the long-standing debate over the desirability of the taxes charged. In a way, the stance over taxation describes the economic “right” and “left” in the HICs. The market-friendly right (such as the Republicans in the U.S. or the Conservatives in U.K.) believe in decreasing the size of the government and its spending so that most of services in economy are given by the private sector. As such they can fall out for lowering taxes (since government spending is quite less) which is according to them distorts the private sector incentives (remember that the Monetarist argument for removing income taxes in the context of unemployment). By  contrast, the interventionist left (such as the Democrats in the U.S. or the Labour in U.K.) consider that a large and active government essential for delivery of the better public services and thus are often against cutting taxes and transferring the responsibility of providing these services to private sector.

The Debate over Taxation is explained below:

There are two the dimensions to the debate over taxation which are: 

1)equity, and the other one is 

2) efficiency

Posted Date: 7/19/2012 3:13:22 AM | Location : United States







Related Discussions:- Concept of taxation, Assignment Help, Ask Question on Concept of taxation, Get Answer, Expert's Help, Concept of taxation Discussions

Write discussion on Concept of taxation
Your posts are moderated
Related Questions
How is economics works with interaction of individual choices? Principles behind the interaction of individual choices: 1. There are gains through trade. • Specialization

factors that causes the shifts in balance of payments

What is Quantitative easing Quantitative easing (QE) is an unorthodox monetary policy which since 2009 has been intermittently pursued by Bank of England and US Federal Reserv

How central bank increases the target rate Let's say that the central bank increases the target rate. When the target rate increases, the central bank needs to raise the overni

Who was the Labour Chancellor Gordon Brown In the period between 1997 and 2006 the Labour Chancellor Gordon Brown was committed to self-imposed Sustainable Investment Rule that

Newspaper vending machines are designed so that once you have paid for one paper; you have access to all the papers in the machine and could take multiple papers at a time. However

Illustrate the UK macroeconomic performance UK macroeconomic performance must be judged on economy's long-term ability to produce growth, create jobs and improve living standa

Explain the Economic functions of money - A unit of account In a monetary economy, all prices may be expressed in monetary units which everyone may relate to. Without money,

A nursing home contracts with an HMO for skilled nursing care at $2.00 PMPM. If costs are expected to average $120 per day, what is the maximum utilization of days per 1,000 member