Question

Purpose of Assignment

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Students are required to use information and tools that they have accumulated in their study of the text and evaluate both sides of those issues, determine which side they can support for each issue, and defend their positions.

1) Tax incentives for saving

2) Balanced government budget

Evaluate both the advocates' position and the critics' position.

Determine which position you support and defend your position.

Answer 1

(1)Tax incentives refers to the plan initiated by the government for the individuals and the business entities to invest the money or save through some scheme or plan/programme thus reducing their tax liabilities. Goverment provides tax incentives to the individuals and business entities so that they can setup, expand their businessess so that it can lead to economic development in that area. States often offer business the tax incentives like free land or water supplies so that business entities can setup there and thus it could lead to economic development. Besides economic development it helps the state government raising it tax revenues and creating employment for that specific area. These are some of the points that positively reflect the tax incentives. Other incentives that are offered to the business entities are land grants, low interest financial assistance, free water supply, no or low tax for the initial years etc. But apart from these positive factors there are some negative factors too, some of which are are follows:-

When businesses are setup it requires clearing up that area and thus it could lead to deforestation, land degradation, wastage of fertile land, disturbance to wildlife animals and the birds etc. These economic factors might also be considered while giving tax incentives. But as far as my point is concerned I think that tax incentives should be given as it leads to evonomic development and many other positive affects as discussed above although it has some negative impacts too but that can be catered by taxing the business entities and planting more trees some where else.

(2) Balanced government budget refers to a budget made or prepared by the government in which there exists no budget surplus and no budget deficit. In simple words it is a budget where there is a balanced equation. Preparing a balanced budget is such a complex task as it requires scrutinity of even the minor things and also the exonomy experiences exonomic hardships as well as great economic growth. Thus in the time of exonomic hardships that is huge deficits the government must seek some help so that budget can be balanced and at the time of budget surplus then such surplus funds must be invested for future or stored a s a reserve for future budget deficits. Balanced budgets has many such beauties and effects but these cannot be applied in the modern times as the economic activities are really complex and thus very difficult to maintain. Also such balanced budgets cannot help in curbing the problems of inflation as well as deflation. Balanced budget can only be used in the stable countries and not developing as these countries are backward and requires huge expenditure while there is no or very less surplus. Such budgets can also be not prepared at the time of war.Thus my point of view is not in favour of the balanced budgets.