tax
It is argued cutting corporation tax rates can increase total tax revenue. This is because:Lower corporation tax will encourage more multinationals to invest in that country
Lower tax rates enable firms to invest more – this leads to higher growth and therefore, higher tax revenues.
Lower tax rates reduce the incentive for firms to use tax avoidance schemes.However, there is no guarantee that a lower corporation tax rate will encourage firms will move to the UK/US. It depends on the economic climate and also any potential response from…
The biggest absolute emissions come from China and the United States. In terms of CO2 emissions per capita, China is ranked only ranked 47th, at 7.5 metric tonnes per capita. The US is ranked 11th at 16.5 per capita and amongst countries with sizeable populations, has the highest CO2 emissions per capita. India is the third highest country in terms of absolute emissions, but only 158th in terms of per capita output with 1.7 metric tonnes per capita.
Selected countries CO2 emissions per capita
Lower income tax rates increase the spending power of consumers and can increase aggregate demand, leading to higher economic growth (and possibly inflation). On the supply side, income tax cuts may also increase incentives to work – leading to higher productivity.
However, the effect of tax cuts depends on how the tax cut is financed, the state of the economy and whether low tax rates actually increase productivity and the willingness to work.
The effects of reducing income tax rateIncreased spending. Workers will see an increase in their
I drive a lot and so am personally affected by fuel duty. The freezing of fuel duty in the past few years has saved me substantial money. But, as an economist I’m dissappointed the chancellor didn’t increase fuel duty.I did get my wish with a new sugar tax – rather unexpectedly, but I was very happy the government could see how a sugar tax could deal with some of the externalities of excess sugar – such…
A citizen’s income, basic wage or Universal basic Income (UBI) is a concept of paying everyone in society a universal benefit – regardless of income and circumstances.
The main advantage is that ensures a minimum standard of income for everyone – without any costs and bureaucracy of means tested benefits. Also, it avoids the disincentive to work that can occur with means tested benefits.
The disadvantage is that is an expensive undertaking to pay everyone in society a universal benefit and there is a concern it may encourage some to live…
The polluter pays principle (PPP) is a basic economic idea that firms or consumers should pay for the cost of the negative externality they create. The polluter pays principle usually refers to environmental costs, but it could be extended to any external cost.
In a purely free market, you would only face your private costs. However, for goods with negative externalities, there are additional external costs, e.g. damage to the environment. This means the…
October 2015 will see England introduce a charge of 5p for plastic bags.
Early evidence from Scotland suggests that a tax on plastic bags can lead to a significant fall in demand. Supermarkets in Scotland reported an 80% fall in use of plastic bags a month after the charge was introduced. (Times). A study in Wales suggested a 70% fall. (Guardian)
However, later studies showed that when the public got used to the tax, demand started to increase again. (e.g. growth in Wales use)
There seems to be widespread…
Firstly, sorry for the low levels of blogging recently. I am working on a new site, waiting for some outside developers. Secondly I am working on completely new Revision Guides for the new economic syllabus coming out soon.
It meant I didn’t do much blogging around the general election – which is perhaps a blessing in disguise. It still annoys me it is so hard to separate fact from political spin (e.g. Government spending under Labour government)- but that’s life.
I do try to be ‘balanced’…
