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53 votes

Is money we make completely taken away by taxes?

No, this will not happen. Government does not tax people just for 'shits and giggles'. Governments do not hoard money at some pile as a some sort of dragon from a fantasy novel. Taxes are levied so ...
1muflon1's user avatar
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21 votes
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Why is bartering uncommon in modern countries?

The main likely reasons why barter is not more common are: The inconvenience of having to find another party who both offers what you want and wants what you offer. Even if such a party can be ...
Adam Bailey's user avatar
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21 votes

Why aren't we seeing carbon taxes in practice?

I think it’s mainly politics. For example, when France tried to implement increases in tax on oil (indirect way of taxing carbon) it led to yellow jacket protest. As you pointed out it’s easy to ...
1muflon1's user avatar
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19 votes

Is money we make completely taken away by taxes?

Wind the clock back in the other direction: where did this money come from in the first place? The government issued it. Render unto Caesar that which is Caesar's, etc. You've also chosen to stop your ...
pjc50's user avatar
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16 votes

Why is bartering uncommon in modern countries?

In the countries that I am familiar with (such as Canada), using barter to avoid taxes is definitely illegal. You are required to report the dollar value of the exchange as revenue. It is treated as ...
Brian Romanchuk's user avatar
16 votes

Why aren't we seeing carbon taxes in practice?

It seems that there are many advantages to carbon taxes, including pricing in the environmental cost and generating revenue (that could offset other taxes). So why are we not seeing them in practice, ...
juhist's user avatar
  • 319
10 votes

Why aren't we seeing carbon taxes in practice?

Just to build up on @1muflon1's (+1) answer: I'd also add the "axe the tax" campaign in British Columbia back in 2008. The carbon tax there is (or at least was) considered a model example of how to ...
bajun65537's user avatar
9 votes

Why can't the Land-Value Tax (in some cases) be passed on to tenants?

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 more people want to live in a particular place, rents ...
Brythan's user avatar
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9 votes

Is money we make completely taken away by taxes?

Your calculation is fundamentally wrong because you are forgetting an important factor - the money that government spends. In your calculation you seem to think that the 10% the government takes in ...
DJClayworth's user avatar
8 votes
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Are spectrum auctions a tax?

Suppose you write some software that you can then freely sell at practically no cost per unit (the wonders of the internet). You want to make as much profit as possible. Since you have almost no per ...
Michael Greinecker's user avatar
7 votes

Is my logic on taxation for this question legit?

The burden of taxation is shared among suppliers and demanders according to the price elasticities of supply and demand. The more elastic side carries less of the tax burden. To understand this, note ...
BB King's user avatar
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7 votes
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Are sales taxes regressive?

It depends on the definition you want to use. You can define a regressive tax as the wiki says, in which case a sale tax would not match. But the goal of definition of different class of taxation is ...
Three Diag's user avatar
7 votes
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Why do we use tax brackets?

I think you've misunderstood how the (UK) income tax brackets work. They work differently to how stamp duty used to work. Stamp duty brackets used to be absolute rates: so when the purchase price ...
410 gone's user avatar
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6 votes

Does lowering corporate tax rates increase investment or provide some other benefit to a nation?

Cutting corporate taxes is one of the tools of the Trickle-Down Economics (TDE) school of managing economic growth. In a New York Times article in 2012, economist Robert Frank of the Johnson School ...
jaxter's user avatar
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6 votes
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Who really pays transaction taxes like VAT or sales tax?

The issue you are asking about is tax incidence. This Wikipedia entry provides a good introduction. In short: it depends on how easily supply and demand respond to price changes relatively to each ...
Matthijs's user avatar
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6 votes
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What at all justifies income taxes (as opposed to sales taxes only)?

There's a fair amount to unpack in the question, so it might be useful to take it step by step, and consider everything from a more abstract, economic theory perspective. ...those who are more ...
AndrewC's user avatar
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6 votes

Why use marginal rather than average tax rates in incentive analysis?

People make decisions based on how the decision will change things. If I work an extra \$1000 worth of time, then I have to pay $\$1000 * \text{marginal tax rate}$ in taxes. The average rate is ...
Brythan's user avatar
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6 votes
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Is the government putting a 20% tax on dividends equivalent to the government owning 20% of the company?

Is the government putting a 20% tax on dividends equivalent to the government owning 20% of the company? No, stock ownership entitles owner control over decision making in the company (via voting on ...
1muflon1's user avatar
  • 56.9k
6 votes

Is money we make completely taken away by taxes?

A distinction must be made, as also other answers suggest, between money and income. If you speak of money, meaning the amount of money you have at some instant of time, and with which you pay taxes ...
BakerStreet's user avatar
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5 votes

The United States' position on the Laffer Curve

Question B in the link answers your question: most participants believe that taxable income would not rise enough to offset the tax cut, indicating that they do not believe we are on the wrong side of ...
dismalscience's user avatar
5 votes

When a tax is imposed on the sellers, the price of the good rises. So, why doesn't the demand curve shift?

I think you're confusing quantity demanded, and the demand curve. The demand curve tells you how much quantity should be demanded at each price point. Therefore changes in price should change the ...
Lee Sin's user avatar
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5 votes
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Is Canada a country of high taxation in international comparison?

Because they are high in comparison. Take a look at the data from the OECD here, for 2015. I have plotted them below: (The red is the personal income tax set by law, and the blue is the one adding ...
luchonacho's user avatar
  • 8,591
5 votes

Monopoly and Taxes (Nicholson Exercise)

First let's look at the specific tax. The profit is $$\pi_s=[P(q)-\tau_s]q-C(q).$$ Differentiating to establish the first-order condition: $$P'(q)q+P(q)-\tau_s-C'(q)=0.$$ If we write $A=\tau_s q$ for ...
Ubiquitous's user avatar
5 votes

If Trickle Down Economics Works, Then Shouldn't "Trickle Up" Economics Work as Well?

As you learn more about economics you should gradually come to distinguish the vocabulary of economics from that of politics (which is also not the same as political science). When politicians or ...
bbecon's user avatar
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5 votes

Wasn't Laffer Wrong?

For your first question, it is hard to say whether your graphs are valid, as you are more or less assuming random functional forms. More accurate graphs would derive the functions based on utility ...
BB King's user avatar
  • 6,238
5 votes

Externalities, Pigouvian Taxes and Wikipedia

The Pigovian taxes are non-distortionary. For example imagine situation where government optimal spending is 100e and before Pigovian tax all 100e was raised through income tax which creates ...
1muflon1's user avatar
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5 votes
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What is the difference between HM Treasury and HM Exchequer?

Collection of tax revenue in the UK is the responsibility of neither of those but of HM Revenue & Customs which has the status of a non-ministerial department. HM Treasury is the UK's economic ...
Adam Bailey's user avatar
  • 8,529
5 votes

How can consumption taxes be made progressive?

This answer simply points out what is, I think, an important part of 1muflon1's answer. There are two ways to think of consumption taxes: One is to tax certain consumption goods with a VAT. Making ...
Michael Greinecker's user avatar
5 votes
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Understanding an article in the BMJ about the sugar tax

A little background. The paper relates to a tax (known as the Soft Drinks Industry Levy) introduced by the UK in 2018 on some soft drinks, levied on manufacturers (not consumers), with the aim, ...
Adam Bailey's user avatar
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