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I don't post on this board very often, and I apologise in advance if this kind of question is being posted all the time. It's just something that interests me though. Are high taxes or low taxes better for a country's economy? I would appreciate any views or comments.

Cheers.

2007-09-16 02:54:55 · 6 answers · asked by Mr X 2 in Business & Finance Taxes Other - Taxes

6 answers

Low taxes, it gives us more capital to spend amoungst ourselves. The country ends up with more in the long run as more transactions take place.

2007-09-16 02:58:24 · answer #1 · answered by Landlord 7 · 2 1

Taxes are determined after preparing the national budget. The Finance ministry has to balance the budget and taxes enable the ministry to do so. The balancing should be done in such a way that the country's needs are met, and at the same time in such a way that the public is spared all avoidable hardship. If you understand these two basic points, you will appreciate that there can never be an answer to the generic question whether high taxes or low taxes are good for the country.It depends upon the circumstances.

2007-09-16 10:09:22 · answer #2 · answered by Kalyansri 5 · 0 1

Somewhere in the middle probably ends up generating the most revenue. Obriously if taxes are reduced to zero, there would be no revenue, so you can't just figure than any lowering of taxes helps by giving more total revenue. But history has proved that some reductions do give more revenue - people are more inclined to invest in taxable entities, or to start businesses that generate tax revenues for example.

2007-09-16 10:49:57 · answer #3 · answered by Judy 7 · 0 0

Keynesian (or slightly statist/democratic socialist) economists say that taxes take money out of the economy but, via government spending, jobs are created and that gives a good and bigger boost to the economy (they call it the 'multiplier').
Of course, they are wrong because no government can know how you or I would prefer to spend our own money at any given moment and can I have my tax money back please Gordon to look after my family.
When a government takes more than 20% of national income in tax the country gradually declines to 3rd rate status; look at UK since 1906, for example.

2007-09-16 10:05:26 · answer #4 · answered by Anonymous · 1 0

It doesn't depend on the taxes, it depends on the earnings by individuals and businesses that affect the taxes. Taxes could be 100% of earnings and profits, but if people aren't making any money or businesses any profits, there won't be any taxes.

2007-09-16 14:01:40 · answer #5 · answered by Anonymous · 0 0

Detroit is one of the highest taxed cities in America. 3% income tax and 68 mills property tax for homeowners (%0.68 per $1000 of value, leads to no one fixing up their homes), businesses pay even more.

And in most places it is a complete dump, complete with crime, grafitti and burned out buildings.

Every dime spent on taxes is one less dime being pumped into the economy, one less dime to hire employees, one less dime to increase business, one less dime to feed your kids.

Higher taxes lead to ever growing government appitite for more, lower taxes lead to politicians that learn how to spend within their means.

2007-09-16 10:24:17 · answer #6 · answered by Gem 7 · 0 0

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