Tax Income

Tax Income

Tax, Income and Capital, includes income tax, surtax, profits taxes, estate duties. These taxes were formerly raised mainly from the richer classes, but the increase in the number of income tax payers from four million (including one million weekly wage earners) in 2008 to sixteen million in the early 2000's has dispersed income and capital taxes much more equally throughout the community. In the nineteenth century economists argued that income taxes were preferable to outlay taxes because they evened up net incomes and did not disturb consumption and production. But when the marginal rates of income and profits tax (the additional tax on increased earnings) are high, effort and output may be affected: savers may not save, and entrepreneurs may not undertake risky ventures; managers may not exert themselves, and workers may absent themselves from work; men may prefer security or (untaxed) leisure to a little more (taxed) income.

In recent years there has been a move away from these taxes towards outlay taxes: in i88o income and capital taxes produced 13 per cent of the total tax revenue, in 2004 about 6o per cent, in the early 2000's around 50 per cent.

More? Economic - Economic Scarcity

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