Macroeconomics As A Science Deals With The Performance And Behavior Of The Economy

1184 WordsApr 23, 20175 Pages
Macroeconomics as a science deals with the performance and behavior of the economy as a whole. It focuses its attention on the economic growth, business cycle, interest rates, inflation and the behavior of major economic aggregates such as the government, household , and the business sectors. Macroeconomics is about large organizations and how their actions influence an economy in general. The Case for a Border-Adjusted Tax is just the right example of how some actions of different business can change the entire corporate tax system, which appears to be a vital part of the nation’s economy and GDP. This case tells how domestic businesses use the complicated system to avoid taxations. They move their profits offshore or even go as far as…show more content…
This kind of adjustment would discourage the shifting of profits and activities overseas. Such arguments make this new tax look extremely beneficial. However, there is a number of critics from the opposing sides. Ones claim that this new system would be too complicated. But if to look closer into it, it appears to be a lot easier to understand than the one that is used now. The article claims that the new system would replace the much more complex calculation of a company’s income, which must also account for offshore and cross-border transactions. Therefore, it would also get rid of the complex tax and regulatory measures. Second claim the article discusses is the progressiveness of this new adjustment. The opposing side is concerned that this change won’t benefit much the economy. However, the adjustment undermines to tax squarely the owners of corporate capital rather than regular workers, whose wages already suffer from the flight of productive investment capital to lower- tax counties. The last two concerns that are covered in the paper are about the possible redistribution of income away from sectors based on import shares and the erection of trade barriers. The first concern is justified with the following statement “ In truth, importing industries should expect on the whole to experience a shift in the composition of their costs rather than an overall increase in their costs”(pg.2). Further, this statement is supported with a good reason, which

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