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Incidence of taxation - Public revenue, Public finance Video Lecture | Public Finance - B Com

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FAQs on Incidence of taxation - Public revenue, Public finance Video Lecture - Public Finance - B Com

1. What is the incidence of taxation?
Ans. The incidence of taxation refers to the distribution of the tax burden among different groups or individuals in an economy. It examines who ultimately bears the economic burden of a tax, whether it is the taxpayers themselves or other parties such as consumers or producers.
2. How does the incidence of taxation affect public revenue?
Ans. The incidence of taxation has a direct impact on public revenue. If the tax burden falls on individuals or groups with a higher ability to pay, it is likely to generate more revenue for the government. On the other hand, if the tax burden falls on those with lower income or less ability to pay, it may result in lower revenue as they may struggle to meet their tax obligations.
3. What factors determine the incidence of taxation?
Ans. Several factors influence the incidence of taxation. These include the elasticity of supply and demand, the relative price sensitivity of consumers and producers, the market structure, and the mobility of resources. The tax incidence can also be affected by the presence of subsidies, tax exemptions, and other government policies.
4. How can the incidence of taxation be measured?
Ans. The incidence of taxation can be assessed through various measures, such as the analysis of tax burdens based on income quintiles or deciles. Economists and policymakers often use tools like tax incidence models and simulation techniques to estimate the impact of different tax policies on different income groups and sectors of the economy.
5. What are the implications of the incidence of taxation for public finance?
Ans. The incidence of taxation has significant implications for public finance. It helps policymakers understand the distributional effects of tax policies and make informed decisions about tax rates, exemptions, and other tax-related measures. By understanding the incidence of taxation, governments can design tax systems that promote equity, efficiency, and revenue generation while minimizing any potential adverse effects on different segments of society.
37 videos|35 docs|15 tests
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