Overview of Business Taxes

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Business Taxes Business Taxes also known as corporate tax is imposed by the government on the businesses, which becomes government's income that it uses in development and welfare work (Cope, pg. 19). Corporate tax is an expense for the business but if it is too high the business will be reluctant to pay these taxes this might even increase the chances of tax invasion. Business might also try to shift the taxes incidence on the buyers in the term of high prices, which might give rise to inflation, on the employees in terms of low wages that might make standard of living low, and on the shareholders in terms of low profit causing them to withdraw their investments. Although this all seems not so serious but apart from these private cost on the employees, customers and shareholders it also increases the social cost. When businesses especially ones, which sell goods whose prices elasticity of demand is elastics, cannot increase prices they look for ways to cut down on the quality or the quantity of the product in order to reduce their cost of production and to increase their profits. This decreases incentive to produce and therefore the GDP is affected. In order to cut down on the cost of production they use resources of poor quality, which harms the environment in term of air pollution. Furthermore which burden of high taxes on them they might ignore the necessary laws of disposing of the waste from the factories in a proper way. The dreadful effect of raise In the prices of
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