There are plenty of things about taxation that people are not aware of. Well, primarily the main objective of taxation is to increase the needed revenue to meet the expenses. Taxes are radically a tool used for controlling as well as regulating to put an impact or to influence the pattern of production, consumption, and the distribution. A lot of people wonder what is need of paying taxes; well Tax is the money that is paid to the Australian Government by the people and business which is then collected to pay services that are inclusive of education, defense, health, social security, and for roads & railways.
There are a lot of people who want to know about the economic effects of the taxation, well the followings can be really helpful as I have tried to explain almost all the important points that one should know. The taxation leaves an influence on the production and growth, therefore, to know thoroughly about the three effects,
- Influence on the Ability to Work & Save: The establishment and settling of the tax results on the diminishing of disposable income of the payers. Reducing their expenses on necessities for the sake of efficiency will not be able to work. When it comes to a rich person, it has not much of the effects on the efficiency to work. Well, taxes have a damper effect on the ability to save, work and invest.
- Influence on Work, Save & Invest: Radically, the burden of tax money and the psychological burden of tax leaves an impact on the will to work, save, and invest. The temporarily imposed taxes are required to meet emergencies and therefore do not create adverse effects on the will to save, work, and invest.
- Influence on Allotment of Resources: So by redirecting the resources to the required direction, taxes/taxation can leave an effect on the volume of the production as well as on the pattern of production when it comes to the economy. If they implement high taxation of the harmful drugs and the commodities there can be reduced in their consumption.
I’m Joe Madrajat and being an accountant by profession, I have acquired prerequisite skills that will help you with managing your accounting, financial planning, and taxation related tasks.