How Do Taxes Affect The Economy

The main function of the taxes is to create revenue for government. Taxes enable the government to carry out many services such as, building roads, schools, parks, maintaining public security department. Government is also responsible for general services lile council and health services. It also serves redistribute wealth from rich to the poor. By taxing the rich higher, government makes sure there is equality. Taxes change economic growth. All this benefits people get from taxes do not make it actually good. It intends to offset the market as it reduces both supply and demand and increases the price. It also affects the supply of labor, low wages, high prices, lost jobs. Overall, Tax causes major effects on economy.
This paper will use the happenings discussed in Mankiw’s reading on Tax, The Brooking’s article, Effects Of Income Tax Changes On Economic Growth, Midimagic, article Top Ten Effects Of High Taxes, Reference.com’s Why Do People Have To Pay Tax, Miller 's chapter 17 and chapter 4 questions to discuss the effects of taxes on economy and what the future might look …show more content…
It states that government enacts taxes to raise revenue and that revenue must come out of someone 's pocket. Government uses tax money for society such as, building roads, schools, parks, maintaining public security department. Government is also responsible for general services lile council and health services. It states taxes also serve redistribute wealth from rich to the poor. The sales tax is same for everyone. It does not matter if someone is really poor or not’ they must pay sales tax when buying something. It concludes with the negative effect of taxes on economy starting how taxes are intend to offset the harmful effects on consumer goods such as gasoline ad electronics that exert a considerable negative impact on the environment, so these items are taxed in order to fund measures to combat their damaging