todd flanders: daddy, what do taxes pay for? ned flanders: oh, why, everything! policemen, trees,...
TRANSCRIPT
• Todd Flanders: Daddy, what do taxes pay
for?• Ned Flanders: Oh, why, everything!
Policemen, trees, sunshine! And lets not forget the folks who just don't feel like working, God bless 'em!
Okay, Marge, if anyone asks: You require 24-hour nursing care, Lisa's a clergyman, Maggie is seven people, and Bart was wounded in Vietnam.
Tithe barn
Government's view of the economy could be
summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it.
The art of taxation consists in so plucking the
goose as to obtain the largest possible number of feathers with the smallest possible amount of hissing.
http://www.youtube.com/watch?v=L2qMFpbiw
mw
What taxes pay for.
Regressive taxation: takes a larger proportion of poor people’s income.
Proportional taxation: the tax collected rises proportionally to income.
Progressive taxation: the tax collected rises more than proportionally to income, in other words the burden falls disproportionately on richer people.
Types of taxation.
Indirect tax: a tax on spending.
Direct tax – a tax levied directly on the income
or profit made by firms and individuals.
Can you think of a…..
A progressive, direct tax
A regressive, indirect tax
A proportional, direct tax
A progressive, indirect tax.
A regressive, direct tax.
A proportional, indirect tax.
Marginal Tax rate: tax on additional
income.
http://www.deloitte.ie/tc/Results.aspx
Tax bands or tax thresholds or tax brackets.
http://www.hmrc.gov.uk/rates/it.htm income
tax allowances.
Tax rate 2012 to 2013
tax year2013 to 2014 tax year
2014 to 2015 tax year
Basic rate 20% £0 to £34,370 £0 to £32,010 £0 to £31,865
Higher rate 40%
£34,371 to £150,000
£32,011 to £150,000
£31,866 to £150,000
Additional rate 45% (50% for 2012 to 2013)
Over £150,000 Over £150,000 Over £150,000
Increasing the tax bands is effectively the
same as a tax ______, or _________ ________ __________.
http://www.bbc.com/news/magazine-26327114
Increase taxes or cut spending?
Increasing taxes could backfire – Laffer curve.
Increasing taxes results in more uncertainty.
Increasing taxes affects incentives. Increasing indirect taxes has an impact on the
CPI. Increasing indirect tax can incentivise smuggling. Increasing indirect taxes on price elastic goods
actually results in less revenue. High wages in the public sector draw talent from
the private sector – this inhibits growth. So taxes should not be increased – public sector wages should be cut instead.
The poorest are most dependent on
government assistance – they will be most severely affected.
Cutting expenditure
Who the allowance is for Rate (weekly)
Eldest or only child £20.30
Additional children £13.40 (per child)
For additional children, the welfare falls due to
___________ of __________.
Cutting training and education for the
unemployed can create long term unemployment – the social costs of that are far greater than the current cost of providing the education.
Governments provide merit goods – cutting
government expenditure means (in all likelihood) that these will not be provided in the same quantity or quality.
Wages in the public sector should be
reasonably generous – public servants such as policemen, firemen, teachers, doctors and nurses provide an invaluable service the their country.
Cutting wages and benefits for public sector
workers causes industrial action and strikes