ACC 202 WEEK 2 ASSIGNMENT
Understanding Economics
ECO: 100
November 27, 2012
Understanding Economics
From as long as I could remember Taxes have always been apart of our daily lives. Taxes can often be a big burden for most, they can also be a help and used for many other functions. If it was not for taxation our roads, public buildings would be a complete mess. Our emergency services such as, law enforcement, EMT, and Fire/rescue thrive off of tax dollars, many of our healthcare offices also use tax payers money to stay open. The taxing process from distribution to collecting them has people on the fence with different point of views. In this paper I will be discussing the questions raised about taxation.
What happens to net personal income when the government raises taxes? When the government raises taxes, it will decrease your net personal income. As the government raises taxes, most people’s net personal income will decrease, which means that their disposable income decreases as well. When this happens people tend to spend less money only to avoid going into debt, which will soon affect the market’s income because they are no longer buying goods and services with their disposable income. This problem will eventually lead to a decrease in total tax revenue as the gross incomes of the population can drop.
When the government lowers taxes?
When the government lowers taxes people feel more comfortable with spending more of their money. Lower taxes allow the population to buy more goods and services because they know that their money will go a long way. The lowering of taxes along with a controlled government over looking spending will have a fast and positive effect on the economy. People spending more money will not only stimulate the economy, but will eventually lead to more jobs. Lower taxes equals’ happy people and a better economy.
How is GDP affected by higher taxes and Lower taxes? The Gross domestic product (GDP) is
ECO: 100
November 27, 2012
Understanding Economics
From as long as I could remember Taxes have always been apart of our daily lives. Taxes can often be a big burden for most, they can also be a help and used for many other functions. If it was not for taxation our roads, public buildings would be a complete mess. Our emergency services such as, law enforcement, EMT, and Fire/rescue thrive off of tax dollars, many of our healthcare offices also use tax payers money to stay open. The taxing process from distribution to collecting them has people on the fence with different point of views. In this paper I will be discussing the questions raised about taxation.
What happens to net personal income when the government raises taxes? When the government raises taxes, it will decrease your net personal income. As the government raises taxes, most people’s net personal income will decrease, which means that their disposable income decreases as well. When this happens people tend to spend less money only to avoid going into debt, which will soon affect the market’s income because they are no longer buying goods and services with their disposable income. This problem will eventually lead to a decrease in total tax revenue as the gross incomes of the population can drop.
When the government lowers taxes?
When the government lowers taxes people feel more comfortable with spending more of their money. Lower taxes allow the population to buy more goods and services because they know that their money will go a long way. The lowering of taxes along with a controlled government over looking spending will have a fast and positive effect on the economy. People spending more money will not only stimulate the economy, but will eventually lead to more jobs. Lower taxes equals’ happy people and a better economy.
How is GDP affected by higher taxes and Lower taxes? The Gross domestic product (GDP) is