Taxation

What is taxation

A tax on buying a good or service. The revenue is collected ny the government.

Name one cost of taxation and evaluate(to do with firms)

Business may decide to stop production completely shut down and move to another country

This depends on wheter the business likes other things about the country or not.

Name one cost of taxation and evaluate (to do with inequality)

Indirect taxes can increase inequality because eveeryone pays the same amount but its a larger portion of a lower income households’ income.

Name one cost of taxation and evaluate (to do with criminal activity)

Higher prices could lead people selling it in a black market. This means tht the product is obtained illegally and is sold without any tax. This may be a risky version sold

This depends on the amount of policing to prevent sellers from doing this.

Name one benefit of taxation and evaluate it (to do with firms)

The tax could encourage businesses to re-design and create safer goods.This is because they don’t want to pay the tax—>reduces negative externalities

This depends on whether th firms have enough funds to do this , larger business are more able

Name one benefit of taxation and evalute(to do with the government)

The tax revenue collected can be used to help the governmet to pay for other essential services.

This depends on how much the tax i, it may not raise a lot of funds.