Question

Why does the government choose to levy taxes?

Why does the government choose to levy taxes?

Homework Answers

Answer #1
  • The government usually levy taxes usually with an aim to earn higher revenues.
  • Taxing the consumption of goods and services that are consumed or produced heavily helps the government in preventing over production or over consumption of certain goods and services that might harm other's.
  • For example, the government usually taxes the consumption of harmful goods like tobacco, alcohol, cigarettes etc.
  • This will not only prevent the abuses that follow their consumption but also helps government in collecting large revenues.
  • That is, when such goods are taxed, some people will refrain from purchasing those goods but others who are addicted will end up paying higher prices to obtain them.
  • This will eventually Increase the revenues that are generated from the taxation on such goods.
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Why does a reduction in taxes have a smaller multiplier effect than an increase in government...
Why does a reduction in taxes have a smaller multiplier effect than an increase in government spending of an equal amount? Tucker, Irvin B.. Macroeconomics for Today (Page 323). South-Western College Pub. Kindle Edition.
Should government decrease the weed taxes why or why not
Should government decrease the weed taxes why or why not
Suppose the economy is producing at the natural rate of output and the government levy a...
Suppose the economy is producing at the natural rate of output and the government levy a tax on production. Everything else held constant, this policy action will cause ________ in the unemployment rate in the short run and ________ in inflation in the short run.
Why would the British government (or any government) choose to issue perpetuities (consols) over other debt...
Why would the British government (or any government) choose to issue perpetuities (consols) over other debt instruments? Also, from an investor's perspective, why would someone choose to purchase a perpetuity (consol)?
why would a government choose BOT project over BOOT project
why would a government choose BOT project over BOOT project
why would the government decide to increase taxes on people with the highest income. (This in...
why would the government decide to increase taxes on people with the highest income. (This in the classical model in a closed economy.)
Would you choose a bond issued by an agency of the U.S. government or a government...
Would you choose a bond issued by an agency of the U.S. government or a government sponsored enterprises (GSEs). Why?
Why does the U.S. government pay for whistleblowing?
Why does the U.S. government pay for whistleblowing?
The Government may prevent negative external effects by levying a tax on goods and services that...
The Government may prevent negative external effects by levying a tax on goods and services that result in additional costs. Government intervention is needed to help "balance" negative externalities. With a negative external effect, the goods' value is higher than assumed. Because the social marginal cost curve is higher than the private marginal cost curve, the Government should intervene to increase taxes on goods such as imposing tariffs on polluting industries or taxing bad goods such as alcohol.Which is why...
Explain why government policies are designed to influence arrogate demand would require policymakers to choose between...
Explain why government policies are designed to influence arrogate demand would require policymakers to choose between inflation and unemployment.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT