GOVERNMENT BUDGETING AND FINANCE - (TAXES)

Government Budgeting and Finance - (Taxes)

Government Budgeting and Finance - (Taxes)

Taxes in America

The taxation system of a country depends upon the particular economic structure of the given country. It is much logical to assert that levying or imposing tax and collecting them is essential for the economic promotion and all-round development of the country. So, policy makers and all the concerned are found to have close adherence in designing a well formulated tax policy that can render a positive change in the tax administration and economic infra-structure of the country as well. At the heart of the economic policies of a given country, tax system occupies a prominent place. Countries have long been striving to introduce a better tax regime in order to get out from economic depression. Accordingly, they are designing the reform agenda aimed at implementing a better tax mechanism in the country. Global experiences regarding the tax administration suggest that the core reason behind the failure of the tax mechanism in not addressing the issues of tax regime effectively is the imbalances of fiscal policies of the country. (Wallace 2004)

Discussion

Politicians and policy makers should duly consider the issue. So, the argument of exempting sales tax is necessary to by- pass any negative impact of tax base. Of course, this can provide the same benefit or facility to all the consumers or citizens of the country irrespective of their economic standard, howsoever vulnerable they are. (Steuerle 2008)

It is the settled principle that taxation system of a particular territory is applicable both to the customers and producers of the products. Obviously speaking, taxation may discourage the supply and demand cycle. If the suppliers or consumers consider the levied tax as burden, this may affect the consumption and businesses of the country. Undeniably, taxation over personal income and business asset bear an adverse impact on the economy. Certainly, this discourages people to deploy their full concentration in economic engagement and advancement of businesses in the country. In this connection, corporate gain tax is also subject to generate the same consequence on the economy. Increasing tax rate certainly import some negative signals on the economy of a given country. Accordingly, sales tax or value added tax has another implication or significance in a given fiscal policy. This promotes the businesses and economic development though investors may be somewhat discouraged in case of the implementation of such tax base. People would be frustrated as their trend of consume would be restricted and the government would be at liberty to put a check on the consumption of the people. This, otherwise, would manifest mass dissatisfaction for the people. (Sachs 2005)

On the face of the practical situation, it has been the essential consideration to develop the policies to efficiently address the issues that are impeding for the sound regulation of an effective tax regime. At the same time, the issue of developing fiscal policy should be kept intact. Fiscal solvency should be earned through proper planning and action ...