The reason why the tax expenditure is more than the tax revenue generated and the benefits of the tax Concept Introduction: Tax: Tax is the primary source of a country’s revenue. This is collected from various sections of people by various means. The tax collected is then used to fund public utility projects and run government programs. Answer: Tax Expenditure: Tax expenditure is the difference between the proposed revenue to be collected and the actual revenue collected. This includes various leverages provided by governments such as rebates, deductions, subsidies etc. Tax expenditure is an opportunity cost . Tax Revenue: Tax Revenue is the income generated by the government from its citizens, corporate and other entities that use the country’s resources such as land, labor, raw materials etc to earn money or its equivalent. Tax is the major source of income to a government’s treasury.

Question

Want to see the full answer?

Answer 1

Question

Chapter 7, Problem cWYWL

To determine

The reason why the tax expenditure is more than the tax revenue generated and the benefits of the tax

Concept Introduction:

Tax:

Tax is the primary source of a country’s revenue. This is collected from various sections of people by various means. The tax collected is then used to fund public utility projects and run government programs.

Answer:

Tax Expenditure:

Tax expenditure is the difference between the proposed revenue to be collected and the actual revenue collected. This includes various leverages provided by governments such as rebates, deductions, subsidies etc. Tax expenditure is an opportunity cost.

Tax Revenue:

Tax Revenue is the income generated by the government from its citizens, corporate and other entities that use the country’s resources such as land, labor, raw materials etc to earn money or its equivalent. Tax is the major source of income to a government’s treasury.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

1. Imagine a society that produces military goods and consumer goods, which we'll call "guns" and "butter." a. Draw a production possibilities frontier for guns and butter. Using the concept of opportunity cost, explain why it most likely has a bowed-out shape. b. Show a point that is impossible for the economy to achieve. Show a point that is feasible but inefficient. c. Imagine that the society has two political parties, called the Hawks (who want a strong military) and the Doves (who want a smaller military). Show a point on your production possibilities frontier that the Hawks might choose and a point the Doves might choose. d. Imagine that an aggressive neighboring country reduces the size of its military. As a result, both the Hawks and the Doves reduce their desired production of guns by the same amount. Which party would get the bigger "peace dividend," measured by the increase in butter production? Explain.

A health study tracked a group of persons for five years. At the beginning of the study, 20%were classified as heavy smokers, 30% as light smokers, and 50% as nonsmokers. Resultsof the study showed that light smokers were twice as likely as nonsmokers to die duringthe five-year study, but only half as likely as heavy smokers.A randomly selected participant from the study died during the five-year period. Calculatethe probability that the participant was a heavy smoker

Consider two assets with the following returns: State Prob. of state R₁ R2 1 23 13 25% 5% 2 -10% 1% Compute the optimal portfolio for an investor having a Bernoulli utility of net returns u(r) = 2√√r+ 10. Compute the certainty equivalent of the optimal portfolio. Do the results change if short-selling is not allowed? If so, how?