Reducing the income tax rates on low-income earners has an advantage on the economy since it encourages creation of revenue. The measure increases the government revenue, which increases economic growth in the country. There are an increased numbers of job opportunities due to the presence of extra income to invest in business ventures. The tax burden moves to the medium and the wealthy class in the society; balances the taxation system as the poor avoid the burden.
The government exercises a refund payment scheme to the taxpayers who do not pay income tax. These funds benefit the low income-earners as it sets in an entrepreneurial boom, which benefits the country’s economy. The government recovers these funds through the taxes of the wealthy citizens, such as big business owners. The low -income earners pay other taxes, which contribute to the provision of public goods. The government acquires funds from other sections of the economy to maximize revenue for public expenditure.
The reduced tax rates have a positive impact on businesses. The reduced rate encourages business owners to increase their efforts in production, which increases their revenues. Businesses expand their operations to maximize their profits. The government benefits from this process due to increase in public revenue. The large corporations and wealthy business owners pay for the reduced tax rate since they benefited from the previous scheme, where tax rate was equal for all individuals. This however, does not cater for the reduced tax, as there is an overall reduction of tax rate in all income levels.
Tax rate reduction has helped the low and income earners increase their levels of disposable income. There has been increased economic growth over time due to increased level of investment in the economy. The tax burden has been passed on to the large corporations and wealthy people to create a balance on the distribution of income.
Income Tax Reduction Essay Samples
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WowEssays. (2020, February, 22) Income Tax Reduction Essay Samples. Retrieved November 02, 2024, from https://www.wowessays.com/free-samples/income-tax-reduction-essay-samples/
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"Income Tax Reduction Essay Samples," Free Essay Examples - WowEssays.com, 22-Feb-2020. [Online]. Available: https://www.wowessays.com/free-samples/income-tax-reduction-essay-samples/. [Accessed: 02-Nov-2024].
Income Tax Reduction Essay Samples. Free Essay Examples - WowEssays.com. https://www.wowessays.com/free-samples/income-tax-reduction-essay-samples/. Published Feb 22, 2020. Accessed November 02, 2024.
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