Question

Which of the following is not a reason for taxation in New Zealand? why is correct and why are not correct?

1. To provide revenue to fund public expenditure
2. To redistribute wealth
3. To achieve economic goals
4. To stop people from spending

Answer 1

Answer; Option [d] To stop people from spending.

Explanation:

Taxation systems would try to balance between spending and saving, but would not aim to prevent any one of them.

There choices:

a] Governments raise taxes to primarily fund public expenditure

b] Redistribution of wealth is another objective which aims are taxing higher income groups at higher rates with a view to reduce disparities in income and wealth.

c] Economic goals like improveing GDP, savings, etc.