ECON 201: Short Paper
There is effect when you talk about taxing a country as a whole and founding out that it actually helps or sometimes the functionality of the country to reform taxes as they weather away as time goes on. It was the unfair and demanding taxes the British put on the colonies in the 1700, as the American colonies were finding their identity and still under British rule, in which it lead to a Revolution. Nowadays, there is simply let’s talk it out and reform old taxes and replace with new ones so that we can function more effectively and demand little on the country as a whole. There are taxes on everything, not as much on the let’s tax sugar and tea, and have a revolution, but the effect of a revenue-neutral tax reform has been an important issue in public ﬁnance and macroeconomics over the past three decades.
When it comes down to reform the first is the ‘Revenue-neutral’ tax reform, which involves a switch from a decrease in the income tax rate to an increase in the consumption tax rate. This is to ensure a balanced budget and, hence, tax revenue neutrality. There have been models that have been extensively used to study the effects of tax reform on capital accumulation, economic growth and social welfare. In general, there can be dramatic results in efficiency gains, because of this sort of consumption; there will be taxes that involve less distortion than income tax and consumption. The reform of taxes will eliminate the bias against investment and savings inherent in the income tax system, thereby encouraging capital accumulation and improving future life standards.
Within this volume of the International Journal of Business and Management, volume 7, there was a published work that has been drawn out to say that the United States is suffering from the worst economic crisis since the Great Depression. Politicians and the like are clamoring for actions by the government to create
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