Question

Listen to Taxman by the Beatles. Then answer the following questions.

1. Imagine being wealthy in a country that significantly taxes high earners. Would they move to another country as the Beatles suggest?

2. What would be some reasons to stay?

3. What would the opportunity cost be of moving to another country and could it outweigh the benefit of lower taxes?

4. What are the benefits that one gets from paying taxes?

Answer 1

Answer:
1. ) Being a wealthy in a country where country puts significantly higher taxes for high earner, can be a reason to move to another country. But we need to understand the source of our income, is it movable to the other country and how much does it is dependent on current country. If its solely dependent on staying in the country then moving out to another country could not be possible.

2.) Some reasons to stay are:

• Business which i am doing in this country is not possible to be done from outside with same freedom what i am currently enjoying being citizen of this country.
• Good bonding with neighbors and other people, so because of emotional bonding i may not go
• Unknown in other country, establishing everything from scratch and its fear could be another reason

3.) Following opportunity cost would be there:

• Setting everything from scratch which may take time within which i would have expanded my business even further.
• Decrease in income until my business gets established there could be another opportunity cost.
• Environment in new country may not be as favorable as it was in my home country to scale could lead to opportunity loss.

Yes in some scenarios it can outweigh the benifits that we are getting by paying lower taxes in other country.

4.) Benifits one get by paying taxes:

• Safety, Security and oraganization in the country, and various laws will be maintained by the givernment.
• Getting subsidised daily needs like petrol, Gas, electricity and water supply
• Top class public infrastructure and haelth system we get because of us paying tax to the givernment

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