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Harry Bindloss




GOVERNMENT TAXATION


Taxation: A means by which governments finance their expenditure by imposing charges on
citizens and corporate entities. Governments use taxation to encourage or discourage
certain economic decisions.

Reasons for paying tax:

Wealth redistribution
Can be used as a weapon against the consumption of demerit goods and…

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Harry Bindloss




Value Added Taxes: Tax levied on a percentage of the value or price of the good. Thus
as the price of the good rises the amount paid in tax will rise proportionately.



What are the effects of Tax?

1. Tax increases can cause inflation:
- Wage price spiral…

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