Purchase Solution

Poll taxes and long-term growth

Not what you're looking for?

Ask Custom Question

Discussion Question 1

British Prime Minister Lady Thatcher proposed a poll tax that levied an equal amount of tax on each citizen regardless of his or her income. This tax was repealed after a brief trial period. Why do you think this tax was unpopular? Discuss the pros and cons of the tax and arrive at a conclusive answer.

Discussion Question 2

One strategy of long-term growth is to provide personal tax incentives for households to increase their personal savings. Explain the rationale for this policy. Also analyze the effect this policy might have in the short run on the following macroeconomic variables:

Economic growth
Interest rate
Investment demand
Government deficit

Purchase this Solution
Solution Summary

Taxation and savings incentives in relation to economic growth, interest rates, investment demand and government deficits.

Solution Preview

1.
This tax would be considered regressive, meaning that it falls more heavily on the poor. A tax that is a fixed amount, rather than a percentage, will always be regressive. This is because the poor will end up paying a greater percentage of their income than will the rich. Such a situation is generally considered unfair. It is generally felt that the rich, who can afford to pay more in taxes without really suffering, should pay more, as a percentage, than the poor.

A poll tax is similar to a flat rate tax, which is a fixed percentage of one's income, although it is more regressive. The flat tax has been successfully implemented in certain places, such as Ireland's flat corporate tax. The pros of such a tax are that it would be easy to administer, and is simple to understand. It's argued that our current system, ...

Purchase this Solution
Free BrainMass Quizzes
Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

View More Free Quizzes
Related BrainMass Solutions

  • NPV Analysis- Nagud Company

    all three years Operating Expenses growth: year 1-5%, year 2-5%, and year 3-5% Long Term Debt/Interest: Long-term debt will decrease $500 per year Taxes: No taxes.

  • Taxes on Capital Gains

    486504 Taxes on Capital Gains An investor is in the 33 percent tax bracket and pays long-term capital gains taxes of 15 percent.

  • 14-2. Here are book and market value balance sheets of the U

    Here are book and market value balance sheets of the United Frypan Company (UF): Book Market Net working capital $ 20 $ 40 Debt Net working capital $ 20 $ 40 Debt Long- term assets 80 60 Equity Long- term assets

  • U.S. Long Term Economic Growth

    Long Term Economic Growth Discuss what long-term economic growth is and if there are any limits to the U.S. long-term economic growth? If so, what are they? Is there anything that our government can do to address these limits?

  • Matrix Chip Corporation

    Income statement Sales $880 Costs $626 Taxes $51 Net income $204 Balance sheet Current assets $ 200 Current liabilities $ 400 Fixed assets 2,000 Long-term debt 700 Equity 1,100 Total Assets $2,200 Total Liabilities and Equity $2,200

  • Debt and long-term economic growth

    Fiscal and monetary policies and budget deficits; Debt and long-term economic growth

  • Forecast an Income Statement, Balance Sheet, Cash Flows, Shares

    1,348 1,322 Accrued income taxes 404 489 Short-term debt 156 41 Current portion of long-term debt 33 19 Total current liabilities 6,769 6,301 Long-term liabilities 838 443 Long-term debt 627 590 Minority interests

  • Calculate Current Price Per Share for Cali Corporation

    Interest rate on long-term debt = 8% Tax rate = 40% Dividend payout ratio = 60% Expected long-term growth rate = 8% Shares of common stock outstanding = 10,000 shares Beta = 1.4 Current rate on government T-Bonds = 5% Expected return on the stock

  • Sustainable Growth Rate; Retention Rate; Payout Rate; Margin

    CHAPTER 2: PROBLEM 1 Current Assets $7,500 Net Fixed Assets $28,900 Current Liabilities $5,900 Long-Term Debt $18,700 Shareholder Equity = Net Working Capital = Problems attached.

View More Related Solutions