Taxiation Essay

The current issues that have been created by the market have trapped our political system in a never-ending cycle that has no solution but remains salient. There is constant argument as to the right way to handle the market, the appropriate regulatory measures, and what steps should be taken to protect those that fail to be competitive in the market. As the ideological spectrum splits on the issue and refuses to come to a meaningful compromise, it gets trapped in the policy cycle and in turn traps the cycle. Other issues fail to be handled as officials drag the market into every issue area and forum as a tool to direct and control the discussion. Charles Lindblom sees this as an issue that any society that allows the market to control

The goal of the government and the citizens of the United States should be to incorporate a mixed economy market. Private industries supply most goods and services, and most of the economic productivity supports personal demands. Many American believe that the economy should be based solely on supply and demand. Prices and needs should dictate the market, production and opportunities. However, there are restrictions to the free market system. The government is accountable for education, infrastructure, management of the legal system, national defense, and other programs that are imperative to maintaining the United States. Citizens can help to influence the economy through consumer choices and election decisions. Therefore, both the free market

Government intervention is common in today’s market society. Although difficult to identify at times, it is ever present in most transactions that occur. The idea behind the involvement is promotion of the welfare of the citizens that reside within the government’s rule. Whether establishing or promoting economic growth, employment, income equality, or stabilizing interest rates, the government feels that their hand in the transaction is for the benefit of the consumer. Market failures can be argued in favor or in contradiction of big government. No matter the opinion of the individual, the masses are able to enjoy cleaner air, water, and ground due to increased guidelines set by governing officials.

Explain why government regulation is needed, citing the major reasons for government involvement in a market economy.

A free market system requires some government intervention in the marketplace in order to ensure the safety of society (Zupan, 2011). This intervention is necessary to prevent anarchy, but it must be limited to the protection of life and private property. In addition, government also has the responsibility to establish a fair set of rules by

It is highly debated that the government should not intervene in free market in economics. Some people support government’s interference because that is how the economy should be existing. Others, however, firmly believe that the market itself has the ability to get out of the recession without any government’s involvement. I strongly believe that the government should not be allowed to intervene in our economy. Government involvement in the free market will simply cause more problems than it will solve.

Free market is allocated by individuals and firms responding to supply and demand. The government has many roles in the market society such as protecting property rights, providing public goods and services, resolving market failures and etc. Even though the government doesn’t control the free market, sometimes it needs to have an intervention and to create a better society. A government intervention is necessary to the free market especially for negative externalities, property rights, and income redistribution.

The above graph shows that at the original price level(P), the marginal private benefit(MPB) of cigarette is greater than the marginal social cost (MSC). This means that cigarette is over-consumed and the green triangle between MSB and MPB shows the welfare loss. The government may decide to increase the indirect tax to cigarette as the cost of cigarette(healthcare) outstrip the taxation it collects. The supply curve shifts to the left from S=MPC=MSC to S+tax. The quantity consumed will decreases from Q to Q1 and the problem of over-consumed will be solved as the yellow triangle that represents the decrease in consumption is equal to the original welfare loss triangle.

A strategy that will directly affect the supply of cigarettes is raising the taxes on businesses that sale cigarettes. If the taxes are raised on businesses that sell cigarettes, then many businesses will stop selling cigarettes to avoid paying higher taxes. If many businesses stop selling cigarettes then it will be harder for smokers to get cigarettes. This will also causes the businesses that still decide to sell cigarettes to have higher prices on the cigarettes causing smokers to not buy them.

There are many cities who have implemented bans on cigarettes, but China overall is still the leading consumer of cigarettes in the world. A countrywide tax on cigarettes has been proposed to their Ministry of Finance, and Ministry of Economics and Trade, but a decision has yet to be made. Tobacco production provides substantial revenue to the government and a tax increase will have a significant effect on the central government and reduction of consumption of cigarettes. According to a study done by the group proposing the tax, “a 25% tax increase will have an overall monetary benefit that far exceeds the negative impact on the cigarette industry and tobacco farmers. In financial terms alone, not counting the number of lives saved and medical care cost savings, the gain of the central government tax revenue (24.58 billion Yuan) twice exceeds the loss of tobacco farmers’ earnings, tobacco industry workers’ earning and loss of industry and local government revenue (11.74 billion Yuan)” (Hu TW 107). There many components to this calculation, but some factors included the reduction of cigarette consumption, the number of lives saved, savings in medical care costs, gains in productivity due to avoidance of premature death, industry revenue lost, lost jobs in cigarette industry, loss of tobacco income, and loss of local government

Government interventions is an economic intervention by the government or international institution in a market economy to help impact the economy past basic regulation of fraud and enforcement of contracts. Government regulations are split into two categories, social regulation and economic regulation. Economic regulations obtain to mainly control prices. This was intended to protect consumers and certain companies from more powerful companies. Social regulations obtain to promote objectives that are not economic, such as safe workplaces and a cleaner environment. My Government Interventions are the First Income tax, The Interstate Commerce Act, and The Sherman Antitrust Act. I will evaluate these interventions by describing what it was, what the purpose of the act was, the primary and secondary costs and benefits of the intervention, and if the intervention was economically efficient.

There are three main reasons on how smoking affects the impact of health care cost: an increase on the taxes for purchase of the cigarettes and other limitations will diminish smoking; inflation of more health related issues due to an increase in smoking; and the rise of the cost of health care due to the increase in deteriorating health.

The cigarette industry is known to cause market failure. It burdens society with disease and reduces social economic welfare. These negative externalities are thought to far outweigh any economic benefits that the industry yields (Guhl & Hughes n.d). To combat this, governments implement indirect taxes with the aim of reducing the number of smokers. Evidence shows that this has been the most effective means of reducing demand for cigarettes (Cotter, Dunclop & Perez 2011). In the context of the competitive model, this essay will explain how taxes on cigarettes reduce demand, including discussion of the short-term and long-term price elasticity of demand, how the tax burden is distributed between consumers and producers, redistribution of

In an economy there are two sectors, the public and private. The private sector, by definition, is the part of a nation's economy that isn't controlled by the government.(Investorwords). Several business organizations make up the private sector with the three basic ones being sole proprietorships, partnerships, and corporations. Most are for profit and part of that profit goes to the government in the form of taxes. The private sector can be referred to as a market. Markets operate by themselves and allocate resources efficiently, but they're not perfect. Government regulation of the private sector is justified under two circumstances: when flaws

Cigarettes are not like normal goods since they for most of their users are addictions. The demand curve is therefore close to inelastic (See figure 1 and Perucic). This is again because customers are addicted to cigarettes and nicotine and will pay the extra money to continue to smoke them. Furthermore, cigarettes do not have many close substitutes that people can use instead (Perucic). So when the government imposes a tax on cigarettes the producer will be able to pass nearly all of the cost from the tax on to the consumer, this is due to the inelastic demand on cigarettes and the quantity demanded only decreases a small amount. The tax burden for the consumers in the case of cigarettes in very high and the tax burden for producers is