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Taxation

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Taxation systems are usually modeled in such a way that they take into consideration the social welfare of the citizens. The government and other policy makers have the responsibility of ensuring that the system takes into account the needs of the citizens. The bottom line is that taxation should foster equal distribution of resources. The rate of taxation is usually arrived at after several considerations have been made. The rates are not fixed as they depend on the various economic changes. The issue of how taxation should be distributed among the different economic classes is yet to be addressed.

Whenever economic turbulence increases, the policy makers adjust the taxation rates in an effort to stabilize it. When it comes to income tax rates, the policy makers assume that all citizens have equal preferences on leisure and consumption. Apart from adopting a taxation system that is welfare considerate, it is also the policy makers’ prerogative to offer incentives to the tax payers. In trying to achieve this balance, the government stands to face opposition from certain quarters of the population. This is because for the system to be stabilized, the government has to streamline tax rates with its own incomes and that of its citizens. This means that consumers of a certain product or people of a certain economic class can be taxed differently. This is the reason why taxation is a subject of such passionate debate as far as a country’s economy is concerned.

Taxation is directly connected to economic growth. However, this does not point to definite patterns. For example, higher taxes do not necessarily mean stunted economic growth and vice versa. Tax adjustment usually serves to shift spending towards areas that stimulate economic...

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...he rich utilize more resources in terms of finances and human capital, thereby justifying their higher tax rates.

The debate on whether the rich pay more or less taxes is likely to stay alive depending on the prevailing economic policies and situations. When put in an economic context, both sides of the argument differ to some level. While raising taxes for the rich may be a popular opinion among the citizenry, it does not always translate to positive economic outcomes. Whether the rich pay their fare share of taxes, still remains a matter of opinion. However, it is the duty of the policy makers to ensure that the tax system supports economic growth.

Works Cited

Benson, Tim, and Edward White. “Do the Rich Pay their Fare Share?” Scripps Treasure Coast 9

Oct. 2011: 1. Print.

Lambro, Donald. "Rich Shoulder Tax Burden." Stow City Journal 8.1 (1995): 1. Print.
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