Evaluate the Use of Taxation to Redistribute Income

Evaluate The Use Of Taxation To Redistribute Income There nuclear number 18 two forms of measureation direct revenuees and indirect taxes. rate taxes be taxes salaried directly to the establishment by those on whom they argon imposed such(prenominal) as income tax. Indirect taxes ar paid by home plates through an intermediary such as a retail store, the intermediary then grants the government for example nurse added taxes (VAT). Different taxes result in antagonistic heart and souls. Taxes can be comparative, regressive or progressive in nature. This means that different taxes place different burdens on the big and the low. A restal tax is on in which the pro attribute of income paid in tax is constant at wholly income levels. A low-income household pays the resembling constituent in tax as a high(prenominal)-income household. The rich provide pay more than the brusque in absolute terms, but the burden of the tax will be no greater on the rich than it is on the poor. For example, a household earning 20 000 euros may pay 10% tax to the government, nativeling 2 000 euros. A rich household in the equivalent country pays 10% on its income of 200 000 euros, totalling 20 000 euros in taxes. There is a difference in total regard as but the proportional burden is the same on the rich household as it is on the poor household.

A regressive tax in one in which the percentage decreases as the taxpayers income rises. Lower-income earners pay a larger percentage of their income in tax than higher income earners. Therefore such a tax places a larger burden on trim back income households than it does on high! er income earners. Al about every internal government uses regressive taxes to burn a significant portion of its tax revenues. Indirect taxes such as VAT, GST and sales taxes are in fact regressive taxes, placing a larger burden on those whose ability to pay is lower and a little burden on the higher income earners whose ability to pay is greater. A progressive tax is the most equitable of the three types of tax, because is places the largest...If you require to get a integral essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper