Question

Choose a tax that exists somewhere in the world (Canada or otherwise). It can be any tax you like. Give a very brief description of the tax so we understand what it is.

Then, answer the following: Is it a "good" tax? If so, what makes it a good tax? If not, why not? Don't forget, you should view your answer as a chance to demonstrate some of the concepts you've learned in this course.

Answer 1

Tax name - corporate tax

Corporate tax description-

• It is a direct tax
• Also known as corporation tax or company tax
• Corporate tax is a tax which is levies on the profit of the firm at different rates depending upon the amount of profit (that is it follow slab rate)
• Tax collected from it is used as source of income for the nation.

Is corporate tax good or bad?

Corporate tax is actually good to levied due to following reason -

• It diminishes or curb the political and economic inequality
• Corporate tax is one of the most progressive tax a state may levy since the rich people with more wealth have to pay more taxes since it follow slaab system
• If coporate tax is not there then retained Profits will not be able to taxed due to which people with high income will defer paying personal income tax