Search results
Results from the WOW.Com Content Network
In economics, the Laffer curve illustrates a theoretical relationship between rates of taxation and the resulting levels of the government's tax revenue. The Laffer curve assumes that no tax revenue is raised at the extreme tax rates of 0% and 100%, meaning that there is a tax rate between 0% and 100% that maximizes government tax revenue. [a ...
The original equilibrium price is $3.00 and the equilibrium quantity is 100. The government then levies a tax of $0.50 on the sellers. This leads to a new supply curve which is shifted upward by $0.50 compared to the original supply curve. The new equilibrium price will sit between $3.00 and $3.50 and the equilibrium quantity will decrease.
The collection of revenue is the most basic task of a government, as the resources released via the collection of revenue are necessary for the operation of government, provision of the common good (through the social contract in order to fulfill the public interest) and enforcement of its laws; this necessity of revenue was a major factor in ...
Tariffs have been used for a very long time in the U.S., well before federal income tax, and the federal government does benefit from tariff revenue. Tariffs also can help U.S. companies compete ...
The first is to generate government revenue, noting that even a 10% tariff could help reduce the budget deficit. The second is to force companies to relocate production to the U.S.
The flat tax rate is then applied to the resulting "negative income," resulting in a "negative income tax" that the government would owe to the household—unlike the usual "positive" income tax, which the household owes the government. For example, let the flat rate be 20%, and let the deductions be $20,000 per adult and $7,000 per dependent.
Moreover, the sale does not occur, so the government never collects the revenue that was the whole reason for the distortion. This is the deadweight loss—the government has not merely taken a cut of the benefits from the exchange, it has destroyed those benefits for all three. [7] These are the results optimal tax theorists seek to avoid.
A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and policy that taxes foreign products to encourage or safeguard domestic industry. [1]