Questions tagged [taxation]

Refers to compulsory or coercive money collection by a levying authority, usually a government. The term "taxation" applies to all types of involuntary levies, from income to capital gains to estate taxes. Though taxation can be a noun or verb, it is usually referred to as an act; the resulting revenue is usually called "taxes."

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34 views

Are the EU funds coming from EU citizen's taxes as well?

I was trying to understand how the EU is funded using their official website, but my limited understanding of economy makes it very hard to understand the money pathways from a single unit (the ...
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Is there a standard term for this tradeoff when subsidizing: inducing dependence vs providing support?

I've often heard it informally argued "people will become lazy if you give them handouts". Although I doubt the economic sophistication of most such assertions, I do think they have a real point: you ...
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How much UK income tax is collected from each income tax band?

How much of the 208 billion Income Tax receipts in this 2020 budget policy paper is coming from each of the three (Basic rate, Higher rate & Additional rate) tax bands?
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Why do we use tax brackets?

Majority of countries (if not all) use tax brackets to define how much tax should the earning workforce pay. So we could have something like this. ...
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Neoclassical model with proportional taxes

In a certain economy, time is discrete with periods $t=0,1,2,...$. The economy is populated by many households and identical firms. The utility of a household is: $\displaystyle\sum^{\infty}_{t=0}\...
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Could a carbon tax be a substitute for VAT?

VAT is a tax on consumption. However, while in some instances it taxes negative externalities (e.g. fossil energy consumption) in many other cases it taxes services without externalities or ...
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Do carbon taxes in place today apply to carbon embedded in imports?

I’m giving the example of Sweden whose carbon tax is highly regarded and which is the highest in Europe. Source Sweden has a carbon tax of €110 / t. Source This tax does not apply to installations ...
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What would the price of carbon emissions need to be for the EU to achieve its objective to be carbon neutral by 2050?

The EU committed to net zero green house emissions by 2050. (Source) It is regularly said that the a carbon tax of USD 40-80 / t CO2e (USD 50-100 by 2030) would be sufficient to reach the Paris ...
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What would the consequences of an economy-wide 500EUR/tonne carbon tax be?

I recently calculated that Finnish car owners effectively pay 500 EUR per every tonne of carbon dioxide emitted from the tailpipe of a car. This payment is caused by three taxes that are in practice ...
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Which countries impose family income taxation?

I'm looking for a comprehensive overview of international income tax systems (OECD countries would be sufficient), showing which countries apply some sort of family taxation, i.e. married partners ...
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Any data of Ratio between Haig Simon income and taxable income as a function of wealth/income?

Haig Simon income is simple. It's consumption plus an increase in wealth. Taxable income is often much smaller. https://en.wikipedia.org/wiki/Haig%E2%80%93Simons_income The ratio for most people is ...
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UK Government Coronavirus Job Retention Scheme Funding

During the Covid-19 outbreak the UK government is offering to pay upto 80% or a max of £2500 per month to prevent employers laying off workers; Furloughed workers If you and your employer both ...
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Why does a tariff have no effect to an exporter?

I'm reading Principles of Economics, the paragraph about tariffs in a imaginary country Isoland wrote: "The Isolandian economists next consider the effects of a tariff—a tax on imported goods. The ...
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Taxes on Family leave pay

I don't know if this is the correct forum for this question, but do we have to pay taxes on checks from the government that were paid from taxes in the first place. For example, like Social security ...
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Is there an “ideal” ratio of tax revenue to GDP? Or, at least, can I assume a higher ratio is better?

At the link below, you can see countries have a huge difference in ratios of tax revenue to GDP. Is it fair to assume that a higher ratio is better? Does raising a substantial portion of your GDP in ...
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If the payroll tax were eliminated on incomes below $30000 what would happen?

If you canceled all payroll taxes below $30000 / $60000 single / married what would happen? I know that this could increase firm profits, or increase wages, or the number of jobs, or decrease prices ...
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What is the difference between HM Treasury and HM Exchequer?

Both terms refer to collecting tax revenue, right? What's the difference then? I hoped the relevant Wiki pages would help but they didn't.
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What would be the income tax rate be if it were 'flattened'?

In some recent conversations/speeches (It's voting season), I have noticed many people do not understand how a marginal income tax system works. Not understanding how they are only taxed at the ...
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Optimal tax level that raises revenue R < e given Hicksian demand elasticities

I have to find a uniform tax rate that raises revenue R < e and I am given a Hicksian cross price elasticity demand matrix below. I know I want to use Ramsey's first-best but I am not sure, how to ...
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Do countries with high taxes end up with low government debt but high private debt?

I'm curious if my observation that some Scandinavian countries (Denmark, Sweden) have high taxes, low government debt, but high private (in particular high household) debt is applicable more generally ...
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Are my conclusions correct in context of these examples of forceful extraction of money?

There are two examples, one for a bandit, the another one is for the government. Suppose we have a simple economy, a bandit and a teacher. The teacher can teach the bandit, but the bandit can't offer ...
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If you charge a single (indirect) tax rate, x% on all goods and services in a country, will you get x% back as tax revenues?

Assuming 100% compliance and no leakages, will charging a single tax rate of, say, 10% give us back 10% of the GDP back as tax revenues? What could these leakages be in real life that reduce this?
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Is there an index, parameter, ecuation, or anything to compare the tax pressure exercised by a country in relation to others countries?

In my country we are told often that the tax pressure over the companies and people is huge, making it unbearable and being a reason bankrupting the Economy, and one of the largests in the world. We ...
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Do local taxes help in paying back foreign debts?

I always wonder if increasing local taxes could help countries in paying off the foreign debts? I think taxes generate income in local currency. While foreign debts (from IMF, World Bank etc.) are to ...
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How do we define an efficient tax in microeconomics?

I am currently working through problems to study for an upcoming exam. I am not seeking a solution per se. I am looking at the intertemporal choice model. I am looking at two periods where consumption ...
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Can minimum or subsidies or tax cuts really work? Or will resultant inflation always counterbalance such initiatives? [duplicate]

I was born at the tail end of Eisenhower era and what is clear is that the dollar does not buy what it used to and this inflation has been more or less the trend for many decades. I have yet to hear ...
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Do I understand correctly that taxation-based government expenditures allow GDP to grow?

Suppose (it's an example) GDP= $1 000 000, Marginal Propencity to Consume(MPC)=0.25, that borrowing money is an absolute taboo for our government and that said government wants to increase GDP. What ...
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How much should it cost to close the beach?

For most of the past week a private surfing contest has closed off Steamer Lane - one of California's most popular waves - while paying only a few hundred dollars in permit fees. I think this is far ...
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Is a 6% wealth tax a sustainable source of income?

Elizabeth Warren is planning to pay for various things with a 6% wealth tax on those with fortunes in excess of $1B USD. Now, right or wrong, this seems to be an awfully big annual scoop from a ...
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Why aren't we seeing carbon taxes in practice?

(See also a version of this question under politics, https://politics.stackexchange.com/questions/48764/why-arent-we-seeing-carbon-taxes-in-practice) It seems that there are many advantages to carbon ...
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Why can't the Land-Value Tax (in some cases) be passed on to tenants?

According to https://en.wikipedia.org/wiki/Land_value_tax: Because the supply of land is essentially fixed, land rents depend on what tenants are prepared to pay, That doesn't make any sense. If ...
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How Does Land Value Tax (e.g. Georgism) Decouple Lease Transfer From Improvement Transfer?

In theory, a land value tax (e.g. Georgist single tax), works by the government replacing property taxes with leases on land, as an incentive to invest in property improvements. This obviously works ...
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Efficiency-related reason for net social benefits from income taxation

Found a question that I cannot really find an answer to. I am being asked to consider an economy with many households and assume that the government can only generate revenue by taxing households' ...
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How to quantify tax liability of unrealized cap gains in mutual fund

Consider an S&P 500 mutual fund. At any moment the holdings of the fund include unrealized cap gains that should eventually generate tax liability. Thus, for a potential investor, the fair value ...
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How to assess the effect of changing VAT collection policy to the cash ratio of businesses?

I want to measure the effect of different Value Added Tax (VAT) policies to the liquidity of a business. I am using a simple liquidity measure, the cash ratio. There are three VAT policies which I ...
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Combining wealth and income tax

Did any country ever tried to combine wealth tax and income tax into one taxation policy? For example an income tax which has rate that is dependent on net worth, or some other tax of this manner?
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consequences of an inheritance tax on family owned businesses

Whenever I see the pros and cons of an inheritance tax discusses one common argument against it is as follows: If an inheritance tax is imposed on transferring a family owned business, then this tax ...
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Can corporate tax loss carryforward function like a sort of insurance policy?

I'm a graduate student in mathematics, with a casual knowledge of economics, so please let me know if this question is a non-sequitur or off base. Here's the intuition I'm trying to capture: Suppose ...
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Is loss in tax revenue a negative externality?

I was thinking about how online gambling could cause numerous governments to face a reduction in tax revenue from conventional gambling, upon which taxes do apply in most countries. If governments ...
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Why does Canada have only half the taxes of the UK in the OECD NTCP data?

This data sums taxes with healthcare contributions, private or not, so not surprisingly the US scores high on that measure. But why is Canada so suspiciously low? I mean Canada has less than half (11....
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Which economist suggested solely printing money to borrow and not have bonds?

I remember reading this really interesting idea by some economist that a government need not issue fixed-term debt such as bonds, notes or bills. Instead all it could do is print money and use it to ...
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What impact does deficit spending have on economic inequality?

Taxation schemes can be classified as progressive (the tax rate is higher for higher income brackets), regressive (the tax rate is lower for higher income brackets), or neutral (the tax rate is the ...
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Can a progressive policy be solely funded by a regressive or even proportional tax?

Under what criteria a regressive or proportional tax can be used to fully fund a welfare program or policy that it's progressive (i.e., one that benefits lower-income people more) in nature? Are there ...
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Yang's Impact on Algorithmic Trading?

Presidential candidate Andrew Yang has published the following policy proposals on his website: 1. FINANCIAL TRANSACTION TAX Financial markets have grown dramatically over the past decades. ...
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Why is income tax so high? (UK) [closed]

Granted, I expect this question could be easily answered, but I cannot find a definitive reason as to why income tax is pinned at such a high rate in the United Kingdom. I'm not much of an economist, ...
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Tax by inflation

I am interested in a system where the state prints new money to cover all its expenses. (There is no direct tax collection.) I'm interested in anything you might have to say about this system, but to ...
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Does the contractionary monetary effect of tax conpensate for its deadweight loss?

We all know that if the government impose a tax on a product, then tax revenue is less than loss in consumer and producer surplus. This is known as deadweight loss. We also know that taxing is a ...
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Show that this income tax is effectively a lump sum tax

This is a standard income, leisure tradeoff model. $$ \max_{c,l} \min\{c; l\} $$ $$s.t. \space c = w(1-t)(1-l)$$ $l$ is leisure (where total time is 1), $w$ is wage, $c$ is consumption, and $t$ is ...
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How to calculate capital investment?

So i have this question: After spending 3 million on research, Better Mousetraps has developed a new trap. The project requires an initial investment in plant and equipment of 6 million. This ...