To What Extent Does Tax Evasion Affect the Society
To what extent does tax evasion affect the society?
Word counts: 1510 words
Introduction:
The importance of the revenue to a country is well known in the world. The global financial system has more interconnections now than at any other time in history. (Simser.J, 2008, p.131). Tax evasion is one of most common crimes that damage the order of revenue. This is closely affecting the market economy and daily lives. Normally, most commentators consider tax evasion profoundly unethical. There are some ambiguities regarding the meaning of the very word “taxation” that must be addressed. It is maintained that the meaning of taxation depends neither on the agents who collect it, nor on their objectives. (Bagus, Block, Eabrasu, Howden,Rostan, 2011, p376). With the development of “market economy”, new ways of tax evasion have appeared which can damage the social economy. This essay will argue that tax evasion affect the society from three main aspects; economic effect, distribution of income and allocation of resource in society. That is whether it is beneficial to the increase of GDP; whether the behavior of tax evasion distort the signals of market, led to the loss of efficiency, cause the waste of resources; whether it lead to the distribution of income inequality.
Definition: Tax evasion, by its very nature is difficult to observe. It is an illegal practice where a person, organization or corporation intentionally avoids paying his or her or its true tax liability, failing to report, or reporting inaccurately. Tax evasion is treated as “an effort to convert this coercive behavior into voluntary transactions” (Bagus, Block, Eabrasu, Howden, Rostan, 2011, p375). By altering the conditions of payment and receipt of goods and services, taxation veils preferences of both consumers and producers. Tax evasion might result in increased economic efficiency. Large scaled of tax evasion would not only affect the fiscal revenue of the government, but also
Word counts: 1510 words
Introduction:
The importance of the revenue to a country is well known in the world. The global financial system has more interconnections now than at any other time in history. (Simser.J, 2008, p.131). Tax evasion is one of most common crimes that damage the order of revenue. This is closely affecting the market economy and daily lives. Normally, most commentators consider tax evasion profoundly unethical. There are some ambiguities regarding the meaning of the very word “taxation” that must be addressed. It is maintained that the meaning of taxation depends neither on the agents who collect it, nor on their objectives. (Bagus, Block, Eabrasu, Howden,Rostan, 2011, p376). With the development of “market economy”, new ways of tax evasion have appeared which can damage the social economy. This essay will argue that tax evasion affect the society from three main aspects; economic effect, distribution of income and allocation of resource in society. That is whether it is beneficial to the increase of GDP; whether the behavior of tax evasion distort the signals of market, led to the loss of efficiency, cause the waste of resources; whether it lead to the distribution of income inequality.
Definition: Tax evasion, by its very nature is difficult to observe. It is an illegal practice where a person, organization or corporation intentionally avoids paying his or her or its true tax liability, failing to report, or reporting inaccurately. Tax evasion is treated as “an effort to convert this coercive behavior into voluntary transactions” (Bagus, Block, Eabrasu, Howden, Rostan, 2011, p375). By altering the conditions of payment and receipt of goods and services, taxation veils preferences of both consumers and producers. Tax evasion might result in increased economic efficiency. Large scaled of tax evasion would not only affect the fiscal revenue of the government, but also
References: Simser.J. (2008), “Tax evasion and avoidance typologies”, Journal of Money Laundering Control,11. Bagus.P, Block.W, Eabrasu.M, Howden.D & Rostan.J,(2011), “The ethic of tax evasion”, Center for Business Ethic,UK. Goerke L. & Runkel M. (2011), “Tax evasion and competition”, School of Economic and Management, Berlin. Panades.J. (2004), “Tax Evasion and relative tax contribution”, Public Finance Review,32.