LET'S TALK ECONOMICS🌐♨️👍

Hi Steemeans,♨️ as a graduate of Economics, I can't help but share my ideas and findings with you.👌
So here goes.

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GOVERNMENT EXPENDITURE
During the course of one year, the government of any country undertakes expenditures of various kinds. Such expenditures have impact on the level of economic activities. 👌

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Typically, government expenditures maybe undertaken for the following processes:

1. To build roads and bridges
   
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2. To promote agricultural and allied activities
   
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3. To provide housing for the people

4. To promote educational facilities

5. To maintain law and order

6. To create jobs in different sectors of the economy, etc👍

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All these are provided through a means called taxation.

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TAXATION
Taxation is a form of forced saving imposed by the government on every taxable person living in its territory. It is compulsory and obligatory.

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In return, the government uses the revenue so collected to provide some basic social services such as health, water, electricity, good roads and education, to maintain but a few.

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THE CANONS OF TAXATION
the canons or principles of taxation according to Adam smith

1. DEFINITE: a tax should be specific, by this Adam Smith meant that the amount of tax an individual should pay has to be certain and not arbitrary. The tax payer, as well as knowing his tax liabilities, should also know when and where he is required to pay his tax. The government in turn should be certain of the amount of tax it collects and when to collect it.

EQUITY: a tax should be equitable that is progressive or proportional. By this Adam Smith meant that tax must be equal. Smiths' principle of equality has been modified and made use of by progressive government. The introduction of progressive personal income tax has given rise to greater equity and promote social justice among citizens. Equity deals with fairness in the distribution of real cost of government activities which are borne by the various persons in the society.

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CONVENIENCE : This stresses that taxes should be convenient for the tax payer to pay. It also requires that the payment should be made in good time during the financial year.
NEUTRALITY: its argued that a good tax should not adversely affect incentives. A tax must not produce disincentive to savings or investment. A very high death duty may discourage saving in the form of accumulated wealth and may encourage frugal living.

TYPES OF TAXES
there are basically two types of taxes namely, direct and indirect taxes. The main difference between the two being that the incidence or burden of tax payment fall directly on the payer in the case of direct tax while the payer of an indirect tax bears the burden indirectly. That is, direct tax are those taxes paid direct by the person upon whom they are levied such as income tax, capital gain tax, whereas indirect taxes are levied on one person but ultimately paid by someone else. In short, direct taxes are levied on income and property while indirect taxes are levied on commodities or services.

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FORM OF TAXES
PROGRESSIVE TAX: as the name implies, the tax liability of a tax payer under this system increases as his income increases. Thus different taxes are paid by person's of different income. The higher the income the higher the tax paid and vice versa.

PROPORTIONAL TAXES : Under this scheme, the tax payer are required to pay a certain percentage of their income as tax. The same tax rate is levied on all taxable adults. Like the progressive tax, the actual amount of tax paid increases with the various income levels. However, people on different income levels pay different amounts as tax even though the same percentage may be used.

REGRESSIVE TAXES : This is a direct opposite of a progressive tax for it implies that the more one earns the less and he pays. People in the low income group under this scheme pay higher taxes than those on higher income brackets. This is an obvious policy in income redistribution and no government would undertake such a policy. In the era of rising price, regressive tax will worsen the economic plight of low income earner, reduce their standard of living as widening the gap between the rich and the poor.

USES OF TAXATION.

1. To raise revenue
2. To re-distribute income
3. Protection of infant industry

So, please pay your tax👍

Thanks for reading!🤗
I remain your young Economist 😁Charles Wealth.

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