The Citizens and How the Taxation Options

The Citizens and How the Taxation Options


Taxation almost inevitably affects the behavior of citizens. These other reduce turnover and production in the economy and thus create good loss of wealth. Tax revenue should therefore be collected through taxes that affect little as possible on the behavior of households and businesses. In practice this means striving for neutrality. Neutrality is also important because that it often means simplification of provisions, equal treatment of citizens and limited opportunities for tax avoidance. The threshold for deviating should be high.

The Best Situations

In some situations, however, it is appropriate to use taxation as a guide. These related to society’s income distribution objectives and situations in which households and business consumption and production decisions undermine the well-being of others. Pre-signs of this are environmentally harmful production or consumption. Missing However, tax treatment must be limited to the activities of taxpayer’s well-founded situations and certain taxes. The income distribution function is taxation and environmental control for some excise duties. Not all taxes therefore need to be redistributive or “green,” enough for some well-chosen taxes are.

The Right Options for the Consumption Taxations

Consumption taxation and in particular its most important component, VAT It is natural to entrust the task of collecting tax revenue efficiently in a neutral VAT is a good form of tax. It is not so much because it does not would call for doing work, but because it acts neutrally in the household consumption choices and the company’s investment and production decisions. Besides, it is technically very functional and easy to assemble. VAT should not be subject to income allocation or steering targets. Thus, the value added tax met y strives for uniform rate.

The right Taxations

It is easy to take into account the financial position of households in income taxation. Therefore, it is in this way that tax rates can be differentiated according to the taxpayer’s ability to pay. Either. Income tax inevitably distorts the supply of labor and many other decisions you. Tax rates should be planned utilizing research data on taxation effects on different income groups so that the adverse effects of taxation are minimized. This approach recommends that the recipient of the work incentives will be strengthened, for example by increasing municipal taxation income tax deduction or income tax deduction for income from employment.


Taxation of savings income reduces savings and distorts their allocation. The most beneficial to society. Inflation exacerbates problem even more. Some experts advocate for these reasons the savings so tax exemption for said normal income. In practical tax systems, this model however, it is seldom selected. Some kind of compromise is to tax savings income at a low tax rate. However, current tax rates lead to even in conditions of moderate inflation, to very high effective tax rates. For that the s corp taxes calculator is important.

The current taxation of housing guides the choice of housing. Dock ownership of the apartment. In addition, it reduces the willingness to change the apartment. These incentives cause welfare losses and should be eliminated consider. Cutting mortgage interest rate cuts is not an effective way to reduce these problems. Home exchange and conversion distortion of competition would be easy to achieve by abandoning the housing transfer tax and offsetting the loss of tax revenue with other taxes.

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