As the name suggests, we are here to discuss how taxation rates and needs in the economy homework help budding economists. British economist John M Keynes has designed and developed the intricacies of taxation regime broadly termed as fiscal policy. On a lighter note, John Keynes is famous for the one line phrase â€œIn the long run we are all dead.â€ Since we all do survive in the short run, he designed an effective fiscal policy that states how a government of a state can influence the macroeconomic productivity level by changing the tax regime and public spending.
Future aspiring economists, students of social science need to put sincere effort in studying the taxation process of respective state, to begin with. A detailed study involves rigorous assignments and time-consuming projects. Student life has more facets to it other than mugging up lessons and accomplishing projects within deadlines.
This is the age to break free from the comfort zone and try out something new you are passionate about.People find their calling, usually at this age when they make up their mind about their future career prospect and sets on the journey of their life.
We have decided to cater to students who decide to invest their time studying economic policies and their impact on society as a whole. Taxation rates and needs in economy homework help students gather a robust knowledge on macroeconomic policies. Macroeconomics is a division of economics that deals with fiscal and monitory policies. The Monitory policy is a conglomeration of theory by which central bank influences nationâ€™s money supply that has a direct effect on inflation and public spending.
Taxation levied by the state government on sale and purchase of any goods and service is a source of public funding. Itâ€™s an involuntary financial charge classified into direct and indirect tax regime.Taxes are collected by the government in the form of cash or check from individuals and institutions.
Purpose of taxation rates and needs in economy homework help
- In-depth understanding of source of government funding.
- Analysis of expenditure incurred in building up economic infrastructure to generate growth and employment.
- Economic infrastructure that includes roads, education, healthcare facilities, public safety, defense expenses is used to rate a governmentsâ€™ performance during its tenure.
Major functions of fiscal policy that collects and utilizes tax fund are classified as the following:
- This is the step, to begin with, post collection of taxes.
- It depends on collection of taxes and determines public spending.
- National budget is the determinant of allocation of tax money.
- Directly impacts the economy.
- An allocation must be followed by an efficient distribution mechanism to ensure the benefit percolates down to the last mile of the target community.
- Efficient distribution forms the backbone of the economy and provides explanation for allocation in the first place.
- Restrained spending with focus on growth and development boosts stabilization of economy conducive for investment.
- Unstable economy incurs period of unrestrained growth followed by immediate
- A recurrent slump period is detrimental for investment and damaging for employment.
- Prolonged recession can lead to fatal depression which is not desirable by any means.
- The main purpose of taxation rates and needs in economy homework help is to equip students with the latest information and statistics on growth and development of a state.
- Economic growth and its distribution is a complicated issue that needs rigorous model building to elucidate the theories.
- Private sector alone cannot alone influence growth in the economy.
- Government sector borrows fund to boost growth and development.
Before we start discussing more the fiscal policies, let us focus on the various types of tax collected. Taxation rates and needs in economy homework help provide a clear, logical understanding of the types, methods, and scope of collection of taxes for social benefit.
- Income tax is imposed on individuals and partners of a partnership firm according to the tax regime of the jurisdiction in question. Charitable foundations are, however, excluded from the tax regime.
- Payroll tax imposed on the salaries of employees in the form of â€œdeductions from employee wages and taxes paid by the employer based on the employeesâ€™ ages.â€Its usually withheld from salaries and hence called as withholding tax.
- Sales tax is paid by business owners on sale of goods and services and a portion it is collected from the consumers at the point of sale.
- Excise tax is imposed on manufacturing and production activities carried out under various licenses issued by the government within the geographical premise of a state.
- Gift tax is imposed on transfer of property. Itâ€™s collected in the form of cash, stocks, real estate and imposed usually on the donor.
- Real estate tax as evident from the name is the tax imposed on sale and purchase of real estate.
- Property tax is imposed on the owner of a property built under the jurisdiction of government authority.
- Capital gains tax is imposed on sale of assets that includes real estate, stocks, and government bonds of specified duration. The subject is complicated with its larger ambit and requires thorough discussion.
- Corporate tax is imposed on corporations towards their profit earnings.
- Social security tax imposed on various social welfare schemes and the collection is allocated to benefit mainly the lower income group in a society.
Taxation rates and needs in economy homework help students acquire domain knowledge on how a fiscal policy acts as a balancing mechanism is an economy. It taxes the rich and distributes the benefits among the poor to generate equality in the system.
Change in tax rate has direct effect on public spending which calculates the GDP of a country. Inflation, growth in infrastructure and employment is dependent on the tax structure of an economy.
The obstacles faced by the government in implementing the tax regime are too many to count. There has always been a tussle among the noted economists of the century to decide between the degree of government control over the economy. However, all of them have agreed that certain degree of government control is beneficial for the overall health of the economy.