Investment and production.Ray Suarez: The president’s advisory panel on tax reform met for the second time today, this time seeking the input of Fed Chairman Alan Greenspan.
If the tax becomes high, it can be discourage saving. Maintenance of account and following rules becomes difficult which can give rise to the arbitrary decision of the tax officials. It gives rise to tax evasion and avoidance which are not compatible with the discharge of civil responsibility. Taxpayers in some cases remain hostile to the government as payment is direct from his income and pocket. There are allegations about harassment of taxpayers by the tax administration. As a result, taxpayers face difficulties. In most of the cases, tax provisions are ambiguous and not simplified one. It is difficult to define income and some confusion always remains there. It can be used as an instrument of fiscal policy to control and direct economy in the desired direction.Īrguments against income tax are discussed below –. With a chance of rate quantum of revenue can be increased or decreased. It ensures canon of certainty, thus budget estimates in this regard become a reality. As it is a direct tax it can be easily administered and cost of administration become low. Redistribution of income for social justice can be ensured. 
It can be imposed on the basis of ability to pay.In short, it is a certain percentage of your income that you have to pay regularly to the government.Īrguments for income tax are discussed below – It is applied to both earned income (wages, salaries, and commission) and unearned income (dividends, interest, and rents).
An income tax is a government tax on the taxable profit earned by an individual or corporation.
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