The Different Channels of the Taxation processes

The Different Channels of the Taxation processes
Blue sky, blue sea, white sandand a sole parasol


Taxation inevitably affects the behavior and intentions of households and as a result, costs society more than society to be collected as tax revenue. The aim of designing a tax system is to create an entity that collects the necessary funding, but makes it meet the goals of social justice.

While minimizing the effects of behavioral changes and tax collection costs

The aim is therefore to be economically efficient (neutral) and progressive system in the distribution of what does this mean for?

Deviations from this principle would be mainly related to income distribution and externalities such as guiding business and household choices on environmental issues. For taxes planned from the point of view of the principle of neutrality, these goals should not be set. The income distribution function is best performed and income transfers. Some selected taxes, in turn, steer the environment sustainable behavior for the environment and health. According to this thinking therefore, not all taxes need to be revenue-balancing or ‘green’, certain well-defined taxes perform these tasks. Realization of income distribution and control effects however, needs to be considered at the system-wide level.Consumption taxes are indirect taxes based on the supply of goods and services.


Typical forms of consumption tax are general consumption tax, additional tax and special consumption taxes, i.e. excise duties. VAT is determined as a certain percentage of a good or service, i.e. a commodity selling price. In addition to the general VAT rate, Finland has two reduced tax rate. VAT is credited to the taxpayer at different stages of the production chain taxable products sold. The seller may deduct from his own tax prices of products, i.e. raw materials and services used in the manufacturing process tax paid by the company. The tax is thus paid on the value added in its name and therefore does not affect trade in intermediate products. VAT is also great international trade, as exports are tax-free and imports are taxable according to the tax rate.


Towards the end of his life, he is again a well-off pensioner. The life cycle may also include temporary low-income periods, including due to unemployment, illness or childcare.

5The annual analysis therefore gives a very different picture of the impact of the tax change. Depending on the financial position of the person, depending on the stage of the life cycle the matter is being considered. For example, a change in consumption tax may seem to affect the low-skilled unemployed in the same way as the skilled the consumption potential of the student accumulating his capital.

About the Business student

However, society hardly needs the same concerns as the unemployed. The revenue-sharing effects of taxation should therefore be assessed from a life-cycle revenue perspective. A. However, this is technically more difficult and can only be done in limited in such cases. One way to complete the picture of impact is to use revenue instead consumption data. Get all of it along with the taxes in the  c corp tax calculator.

Analyzes of the income distribution effects of the reforms behavioral effects should finally be included. It is contradictory that decision-making will have to be based on static calculations at the same time if the However, their main objectives relate to behavioral effects.



Be the first to comment

Leave a Reply

Your email address will not be published.