Monday, June 17, 2019
Incidence of Income Tax Term Paper Example | Topics and Well Written Essays - 1500 words
Incidence of Income Tax - Term Paper Example chthonian the progressive income tax policy (a progressive tax takes a larger share of the income of high-income taxpayers than of low-income taxpayers). The incidence of the tax is shifted more on the high-income group than to the low-income group (Samuelson and Nordhaus 1992). avocation are the effects of taxation on incomeUnder progressive income tax policy, ya family with $50,000 income is taxed more than one with $20,000 of income.Not only does the higher-income family pay a larger income tax, still it in fact pays a higher fraction of its income.Such income tax policies are aimed to minimize the distortions between haves and have-nots.It influences the consumption patterns of higher-income families and affects overall consumption patterns of an economy.On the early(a) hand, progressive income taxation policies are politically controversial issues and are regularly used in electoral campaigns. A larger share of the burden of value -added tax falls upon the consumers because the producer/manufacturer (VAT fileed persons or companies) pass on the financial impact of such a tax on to the consumers.Suppose that a product, give voice the laptop, has been imposed a VAT. The burden of this tax imposition allow for not be born by the supplier or manufacturer of the laptops rather it will be passed on to its customers by raising the price of laptops by the percentage of the tax imposed. The ultimate consumer bears the burden of VAT and its him whose consumption is being touched through a value-added tax.AdvantagesRegistration for VAT makes an overall good impression for your company. Since large corporations usually register for VAT, therefore, if a newly established company registers itself for VAT, the customers, and for that offspring suppliers, heed it as an established, large company.Registration for VAT also has financial benefits. If a newly-established company registers for VAT then it automatically avoids the penalties for non-registering when it becomes legally mandatory to register for VAT. It is a precautionary step.