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
the demand for widgets(x) is given by: px=160 -4x the production of widget has the following average variable cost: Avc=2x-20 fixed cost are 162 calculate the output level of widg

A firm is employing 100 hours of labor and 50 tons of cement to produce 500 blocks. Labor costs Rs 4 per hour and cement costs Rs 12 per ton. For the quantities employed MPL = 3 an

Q. Show the Properties of isoquants? Isoquants slope downwards to the right:   It means that, in order to keep output constant; when amount of one factor is increased then the

The UN's Integrated Programme for Commodities Most of the political pressure for ICAs comes from spokesmen for the developing countries.  This is reflected in countless resolu

Q. Simon satisfying behaviour model? The behavioural approach as developed in particular by Richard Cyert and James G. March of the Carnegie School, lays emphasis on explaining

Q. Characteristics of perfect competition market? Following are the characteristics of perfect competition market:  • Large Number of Sellers andBuyers: As there are a lar

Demand Function for Money In the Keynesian analysis , the demand for money is a function of the level of income and the rate of interest. According to Milton Friedman, the dema

What is Microeconomics It studies the principles and problems of an individual business firm or an individual industry. It services the management in evaluating and forecasting

Individual and market demand schedule The plan of the possible quantities that will be demanded at different prices by an individual is called Individual demand schedule. Su

Model Specification   We proceed with the model specification in the following steps. 1)  The economy is composed of competitive firms (F  in number) and identical workers