In: Economics
What is the impact of a tax on a market? What does it take to be a well-designed tax? What type of tax would you suggest?
B) Well designed tax:-
• Equity:- taxation policy should be progressive in nature. Means higher tax is impose on higher income person.
•Simplicity:- A simple tax system help taxpayer in better understand the system and reduce the cost of compliance.
• Transparency:- It means that the taxpayer can easily find the information about the tax and how their money is used in social benefit.
• Adequacy:- It means that taxes must provide enough revenue to government so that government fulfill the basic requirements of society.
C) I suggest Progressive tax is the best tax policy because in this policy, A higher percentage of their income is charge from the higher income individual and offer lower rate to the lowest income group. And this tax impose more burden on rich people and less burden on poor people. So from my point of view progressive tax is the best and fairest taxation system.