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Essay / Taxation - 978
Tax systems are generally designed in such a way that they take into consideration the social well-being of citizens. The government and other policy makers have a responsibility to ensure that the system takes into account the needs of citizens. The bottom line is that taxation should promote equitable distribution of resources. The tax rate is usually determined after several considerations. Prices are not fixed because they depend on different economic developments. The question of the distribution of taxes between the different economic classes still remains to be resolved. Whenever economic turmoil increases, policymakers adjust tax rates in an effort to stabilize them. When it comes to income tax rates, policymakers assume that all citizens have equal leisure and consumption preferences. Besides adopting a welfare-conscious tax system, policymakers also have the prerogative to offer incentives to taxpayers. In trying to achieve this balance, the government faces opposition from certain segments of the population. Indeed, for the system to be stabilized, the government must rationalize tax rates with its own income and that of its citizens. This means that consumers of a certain product or people of a certain economic class may be taxed differently. This is why taxation is the subject of heated debate when it comes to a country's economy. Taxation is directly linked to economic growth. However, this does not suggest precise trends. For example, higher taxes do not necessarily mean slower economic growth and vice versa. Fiscal adjustment generally serves to shift spending to areas that stimulate the economy... middle of document ...... the rich use more resources in terms of finance and human capital, thus justifying their tax rates higher taxes. The debate over whether the rich pay more or less taxes will likely remain alive depending on prevailing policies and economic situations. When placed in an economic context, the two sides of the argument differ to some extent. Although raising taxes on the wealthy is a popular opinion among citizens, it does not always translate into positive economic outcomes. Whether the rich pay their share of taxes is still a matter of opinion. However, it is the duty of policymakers to ensure that the tax system supports economic growth. Works Cited Benson, Tim and Edward White. “Do the rich pay their share of the fare? Scripps Treasure CoastOct 9, 2011: 1. Print. Lambro, Donald. “Rich tax burden on shoulders”. Stow City Journal 8.1 (1995): 1. Print.