Taxes – Part 1

21 04 2011

The government of Will World has decided it is necessary to increase taxes.  They are considering four different options:

  • A 15% tax on business profits
  • An 8% sales tax
  • A increase in income taxes by 5%
  • A tarriff on energy imports of $5 per unit (excise tax)

Before we look at the best tax for Will World, lets consider taxes in general.

  • Income Taxes – Unicorn
  • Sales Taxes – LGT
  • Corporate Taxes – Magnum
  • Property Taxes – SINJ
  • Capital Gains Taxes – CDsquaredK
  • Excise Taxes (includes ‘sin’ taxes, tariffs) – Mangoe

Each group has been assigned a tax. In your groups, research your assigned tax and develop the three most convincing arguments for why your tax is the best option and the three most convincing arguments for why your tax worst option.

Criteria for a ‘good’ tax:

  • Raises sufficient funds for the government (we aren’t looking for a specific dollar value but the tax has to be effective at actually raising revenue for the government)
  • Equitable (this is difficult to define when discussing taxes – consider who bares most of the burden of paying the tax – it is equal? fair?)
  • Minimizes inefficiencies while maximizing social benefit – any tax will reduce the efficiency of the economy, you want to minimize this while providing the maximum social benefit possible. (social benefits can include encouraging positive behaviour, reducing negative externalities, reducing inequality, increasing standard of living, etc.)
Create a blog post that summarizes your tax.  Briefly describe it and your three arguments for and against your tax.
For homework, read over all the posts and comment on which tax you think is ‘best’ on this post.



10 responses

25 04 2011

Whoops, I posted on the wrong one, I’ll just write it again.

I think that Income taxes is probably one of the best taxes because it provides benefits to both the consumer and the government. For the government, it is a stable tax that is adaptable to suit economic changes. For the person being taxed, it is fair as the progressive nature of the tax charges based on how much they make and is not the same for everyone.

25 04 2011

I believe income taxes are the best method of taxation first and foremost because it reaps in the most revenue for the government in comparison to the other taxes. In addition to this juicy positive is the fact that it adapts to the person. This point may not seem clear at first due to my phrasing. It charges based on what a person’s earning are, which is in turn a more “understanding” tax. As a result, people earning less will be able to pay their share comfortably while the more wealthy paying their share. This tax is the best option because it is beneficial for all sides.

26 04 2011

I believe that income taxes are the best mainly because it contributes to both the government and the consumer. In order for a tax to truly be considered beneficial, it must not only help one side of the situation, but both. This tax also insures that people pay the correct amount depending on their financial position.

26 04 2011
Carolyne Wang

I think income tax is the best tax because it is the most equitable. Income taxes vary for people based on their income level, so individuals who make the most money pay more taxes while the individuals who make less money and struggle to make ends meet pay less tax. This forces people who can afford to pay higher taxes to do so and gives more financial freedom to the people who cannot afford to pay a high amount of tax. It redistributes wealth so that the gap between the wealthy and the poor do not widen, and this creates a social benefit as well in that the less wealthy have a higher chance of increasing their quality of life. Income tax also generates enough revenue for the government because everyone who earns an income must pay, and the majority of the population is working in most countries. One possible issue that arises with this tax is that the aging baby boomers will soon be retiring. This not only leads to a decrease in government tax revenue but also an increase in healthcare expenses, which combined can put the government into a lot of debt. Also, income tax can be inequitable in that it may not take into account the number of dependents on the individual making the income, so a mother supporting three children will be taxed the same amount as a single young adult with no dependents making the same income.

26 04 2011
Oleksandr Yesikov

I agree with everyone else and i also think that income tax is the best tax out of all the ones described. The main reason being that some of those other taxes might not apply to a majority of people like the “sin” tax only applies to the people that drink and smoke and property tax only applies to people that own property. Everyone is affected by the income tax therefore the government will get more tax revenue and can provide more services.

26 04 2011
Dylan Huber

I agree with everyone else that Income Tax is the best form of tax. The burden of tax is not equally shared but equitably shared. People who have less money are taxed less and vice versa. It also is proven to make money for the government and it is easy to implement. It’s only downside it has no social benefit except you pay it anyways and you receive a return of it. There is encouragement of good behavior except that you should work which does not really need much encouragement.

27 04 2011
Linda Lei

Same answer with everyone that income tax is the best tax. First, income tax creats equity because they don’t earn the same amount of money, it all based on their incomes. Second, government is able to provide more benefits( better education, health care , transporation, etc) to citizens due to the fact that government have more money in their pocket.

27 04 2011

The tax that I think is the best is property tax. This is because it is one of the most transparent and simple tax systems that we have today in Canada. Property tax is transparent because there are no room for companies to hide a partial cost of the tax, since they cannot hide the visible land that they are using. Also, it is simple because the system for property tax involves strict guidelines about the specific percentage of tax that needs to be paid for each and different amount of land one owns. It is a fair tax because it is truly regulated based on the income of each and every citizens.

28 04 2011

Income tax is the “best” tax. While the largest and hardest hitting of all of the taxes, it has been around for a very long time and is the most fair. It is an enormous percentage of Canada’s tax revenue and increases as one has a higher income. This provides a fair system that works in increments, and ensures that those who are tight on cash manage to get by.

2 05 2011
Heshani Makalande

Income tax is the best out of all, because it is usually a portion of a person’s income. And as we all know the best form of tax collected by the government is income tax. The government collects these taxes in order provide us public benefits. For example, public schools, TTC. Health Care is one of the best benefits we receive as Canadians, and it is supported by the % of our income we pay.

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