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But the value of the finished car doesn't just include that value-added in production, but also the materials and ancillary operating costs used to make the car. Thus, if we want to know the total sale value of the output of the car factory, the relevant measure is not the "net output" (the value-added), but rather the gross output.
Buyers who themselves add value and resell the product pay VAT on their own sales (output tax). The difference between output tax and input tax is the amount paid to the government (or refunded, in the case of a negative amount). Using accounts, the tax is calculated as a percentage of the difference between sales and purchases from taxed accounts.
The effect of this type of tax can be illustrated on a standard supply and demand diagram. Without a tax, the equilibrium price will be at Pe and the equilibrium quantity will be at Qe. After a tax is imposed, the price consumers pay will shift to Pc and the price producers receive will shift to Pp. The consumers' price will be equal to the ...
The output approach focuses on finding the total output of a nation by directly finding the total value of all goods and services a nation produces. Because of the complication of the multiple stages in the production of a good or service, only the final value of a good or service is included in the total output.
A poll tax, also called a per capita tax, or capitation tax, is a tax that levies a set amount per individual. It is an example of the concept of fixed tax. One of the earliest taxes mentioned in the Bible of a half-shekel per annum from each adult Jew (Ex. 30:11–16) was a form of the poll tax. Poll taxes are administratively cheap because ...
The size depends on the elasticity of demand curve. For instance, if the demand curve is linear, the ratio is balanced half and half). Another difference lies in the ad valorem tax and specific tax. For any given revenue, the output from ad valorem tax will exceed the output from specific tax.
Because of the tax, consumers pay more for the good than they did before the tax, and suppliers receive less for the good than they did before the tax . [1] Put differently, the tax wedge is the difference between the price consumers pay and the value producers receive (net of tax) from a transaction. [ 2 ]
Conceptually, the aggregate "intermediate consumption" is equal to the amount of the difference between gross output (roughly, the total sales value) and net output (gross value added or GDP). In the US economy, total intermediate consumption represents about 45% of gross output.