Merits of direct taxes, Managerial Economics

Merits of direct taxes

a.  They satisfy the principle of equity as they are easily matched to the tax payers capacity to pay once assessed.

b.  They satisfy the principles of certainty and convenience to tax payers as they know the time and manner of payment, and the amount to be paid in the case of these taxes.  Similarly, the government is also certain as to the amount of money it shall receive from these taxes.

c. They satisfy the Canon Simplicity as they are easy to understand.

d. Because most of them are progressive, they tend to reduce income inequalities as the rich are taxed heavily through income tax, wealth tax, expenditure tax, excess profit, gift tax, etc. so long as they are alive; and through inheritance taxes or death duties when they die.  The poor and the income groups which are below the minimum tax limit are exempted form these taxes.  These taxes thus reduce income and wealth inequalities because of their progressive nature.

e. Because the public are paying taxes to the government, they take an interest in the activities of the state as to whether the public expenditure is incurred on public welfare or not.  Such civic consciousness puts a check on the wastage of the public expenditure in a democratic country.

Posted Date: 11/30/2012 3:09:22 AM | Location : United States







Related Discussions:- Merits of direct taxes, Assignment Help, Ask Question on Merits of direct taxes, Get Answer, Expert's Help, Merits of direct taxes Discussions

Write discussion on Merits of direct taxes
Your posts are moderated
Related Questions

For Oliver E. Williamson, existence of firms derives from 'asset specificity' in production, where assets are specific to each other such that their value is much less in a second-

Q. Product of marginal revenue? MRPL is the product of marginal revenue and marginal product of labour or MRPL = MR x MPL. • Derivation: MR = ?TR/?Q MPL = ?Q/?L

Can identity economics explain some patterns observed in the Australian economy

“Managerial economics involves use of economic analysis to make business decisions involving the best use of a firm’s scarce resources” Explain the statement with suitable example.

The Consumption Function The consumption function is the relationship  [expressed in mathematical or diagrammatic form] between planned consumption and other independent varia

(i) Do the laws of economics still work today? (use the case discussed in class to answer this question or any other examples) (ii) Provide examples of three factors that can sh

Equilibrium Income In this model, aggregate desired expenditure has three components:  Consumption, Investment and Government Expenditure:


What is increasing marginal cost? Felix’s marginal cost is greater the more lawns he has previously mowed. It is, every time he mows a lawn, the extra cost of doing still anoth