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Governments impose indirect taxes to...
· To raise government revenue - to effectively raise revenue, indirect taxes can be imposed upon price inelastic products so that demand does not fall and thus revenue is gained without impacting firms.
· To discourage consumption - higher prices will discourage some spending on all products with a PED value of more than 1.
· To alter the pattern of consumption - certain goods can be made more price attractive through lower taxes while goods which have high marginal social cost can be made expensive through taxation; e.g. increasing fuel taxes on airlines to better reflect the damage they cause.
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∙ 12y ago
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What happens on equilibrium price when the government impose tax on goods?
if there is equilibrium in the market and the govt. fixes the price then there would be the dead weight loss.
What is an indirect tax that is calculated per item?
Excise tax a+
The government might enact a price ceiling in order to accomplish what?
The government may impose a price ceiling in order to increase supply.
Which type of tax can be shifted from one individual to another through the process of increasing the price of the goods sold?
indirect tax
In the circular flow of the economy what do households do?
Allow Financial sector to hold savings. Pay tax (direct & indirect) to the Government. Spend on consumption, which goes to Producers. Provide factors of production / resources to Producers.
Is the tax on food items a direct or indirect tax?
Indirect tax because they are impose on goods and services
What is Direct and indirect tax?
A direct tax is a tax that is paid directly to the government by the person who is working. An indirect tax is when a person pays taxes to a store and then the store has to pay the taxes to the government.
Can the president impose excise tax?
No, the President of the USA does not have the Constitutional power to impose any tax. That is a power of the legislative branch of the government.
Is federal income tax direct or indirect?
Federal income tax is a direct tax on income and not an indirect tax. Direct taxes are paid directly to the government.
Which type tax is collected by the mediating agent and then forward to the government?
indirect tax
Is gasoline tax a direct tax?
No, any tax paid to a retail store or gas station is called an indirect tax. It is an indirect tax because you pay the tax to the store and they have to pay the tax to the government.
What do you mean by direct tax and indirect tax give suitable examples also?
A direct tax is tax paid directly to the Government, by a person whom the tax is imposed on. An indirect tax is paid indirectly to the Government, trough a third party.A direct tax would be taxes like income taxes, where a person must personally pay a certain amount to the government. Indirect taxes are taxes such as property, social security, and sales tax, where there price of tax is either deducted from wages or added onto the payment of an item. The indirect taxes are paid the Government by the business that collects the tax.
For what purpose may congress impose a tax?
One of the purposes that may make the congress to impose a tax is to increase the revenue of the government. When the revenue is increased, the federal government is able to provide the basic services to its citizens.
Which statement is true of federal taxes?
the government may not impose a tax on church services.
What is direct and direct tax?
A direct tax is a tax that is paid directly to the government by the person who is working. An indirect tax is when a person pays taxes to a store and then the store has to pay the taxes to the government.
Is petroleum tax a direct or indirect tax?
it is an indirect tax
Is vat a direct tax or indirect tax?
VAT- Value Added Tax is an indirect tax. It is also easier for the consumer to pay the amount in installments rather than paying a huge amount to the government for the betterment of economy. You can hire a VAT Tax agent in UAE from Flyingcolour Tax Services to get VAT advise for your business.
