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A consumption tax is a tax levied on consumption spending on goods and services. The tax base of such a tax is the money spent on consumption. Consumption taxes are usually indirect, such as a sales tax or a value-added tax. However, a consumption tax can also be structured as a form of direct, personal taxation, such as the Hall–Rabushka ...
Similarly, business failures and stock market prices tend to be countercyclical. In finance, an asset that tends to do well while the economy as a whole is doing poorly is referred to as countercyclical, and could be for example a business or a financial instrument whose value is derived from sales of an inferior good.
Value added tax or VAT, (in Italian Imposta sul valore aggiunto, or IVA) is a consumption tax charged at a standard rate of 22 percent, which came in on 1 July 2013 (previously 21 percent). The first reduced VAT rate (10 percent) applies to water supplies, passenger transport, admission to cultural and sports events, hotels, restaurants and ...
The statutory incidence of a tax falls on the party, producers or consumers, that has to physically send a check to the government in the amount of a tax. [3] For example, if a person directly pays his or her income tax to the government [4] (with no employer withholding), the statutory burden would fall on consumers. If a tax is imposed on the ...
A common example of this is the so-called sin tax, a tax levied against goods deemed harmful to society and individuals. For example, "sin taxes" levied against alcohol and tobacco are intended to artificially lower demand for these goods; some would-be users are priced out of the market, i.e. total smoking and drinking are reduced. Products ...
Economists expect tax manipulation to increase or decrease consumer spending, though the precise impact of specific manipulations are often the subject of controversy. Underlying tax manipulation as a stimulant or suppression of consumer spending is an equation for gross domestic product . The equation is GDP = C + I + G + NX, where C is ...
A common and specific example is the supply-and-demand graph shown at right. This graph shows supply and demand as opposing curves, and the intersection between those curves determines the equilibrium price. An alteration of either supply or demand is shown by displacing the curve to either the left (a decrease in quantity demanded or supplied ...
A lump-sum tax is a special way of taxation, based on a fixed amount, rather than on the real circumstance of the taxed entity. [1] In this, the entity cannot do anything to change their liability. [2] In contrast with a per unit tax, lump-sum tax does not increase in size as the output increases. [3]