Economics : An Integral Part Of Civilization Of The World

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Economics is an integral part of civilization of the world. In any case, economics issues that emerged in the community is practically quite difficult to resolve. Henry Hazlitt in his book "Economic in one lesson" revealed that economics is overshadowed by fallacies because of two main factors which intensify the problem’s complexity. The first factor is the tendency of people to defend their respective interests. Although some of groups have similar interests with all other groups, yet in fact, they also have competing interests against each other. The second factor causing these fallacies is the tendency of people that will only look at short-term effects of an economic policy or observe it only in a particular group. People are often…show more content…
For only knowing the concept of fallacies in economics, which disclosed by Henry Hazlitt, is not enough to provide a solid understanding, therefore we need to explore the application of this lesson to analyze a real world issue. One example of this lesson is that taxes discourage production, in this essay I will elaborate tax problem in Indonesia, and its effect on short-term and long-term basis to their people.
Taxes play an important role in government funding of a country. Even in the majority, taxes are the main financial source of the government spending and believed to be the driving force of economic growth. By following this philosophy, in order to achieve the annual growth target, as a main source of their fund, government will surely increase the tax revenue target every fiscal year. Likewise, Indonesia’s state revenue is mostly depends on tax, not surprisingly in 2015 fiscal year, it takes 67% of the composition (Budget in brief, 2014). Indonesia’s tax revenue target of IDR 1,489.3 trillion (US$1.49 quadrillion) is set by the government in the 2015, which is increased by 39% from the preceding year, and some experts consider that it was too ambitious (RI tax, 2015). It is because, with an insignificant increase of total taxpayer, it has the potential escalation in any applicable tax rate in this country.
It seems the government is not aware that amid the volatile conditions of economic today,
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