Effects of Taxes

Effects of Taxes Taxes are needed in order to securely administer and fund different governmental organizations, as well as construction and other universal infrastructure services. Many proponents of taxes suggest that taxation is way too extreme within the present day economic trends that exist within America. Taxes do fund many programs and construction of certain projects within America, but also effect certain aspects of America's economy. Taxes do present positive as well as negative characteristics within an economic system. Increased taxes do have a direct effect toward consumers, businesses, and the overall economy. Consumers are exposed to extreme effects of taxes, and may even be effected more than any other group within the economy. Increasing prices on their products due to the increased taxes makes up most of the potential profits for businesses. The consumers therefore lose out because of the increased prices, and must decide on another budgetary analysis. For example, a consumer who is introduced to new taxes may decide to stop purchasing a certain product. A consumer may choose to not purchase a good that my normally go along with another good. This good is a complimentary good and may n

This can be seen in a construction firm. The turnover on certain items such as a new computer network is low due to the increased price with the increase of taxes. This increase in taxes and shortage of processors caused the shortage of computer products in the economy. Businesses refrain from hiring extra help as much as possible, and many time people refrain from working more. Milk is always needed by a consumer, and is thus continuously purchased by the consumer in good times as well as bad times. The business cannot afford to add another worker to a lowered output, which would decrease the efficiency and productivity of the business. Not to mention the costs that the government has to spend to police the tax codes. Another illustration of the effects of taxes on consumers is seen in the saving side of the consumer world. The coffee would be the good that the consumer would purchase, and would not purchase the creamer. Taxes sometimes are increased due to uncontrollable forces, which are the taxes that all consumers dislike. For instance, the taxes cause businesses to increase the costs of goods that consumers buy. Businesses also refrain from selling assets as much as possible. A similar phenomenon would occur for a consumer that participates in buying superior and inferior goods. Another effect that consumers are exposed to is the buying power of a consumer's money. For instance, the increase in taxes on the semiconductor industry caused a massive shortage of computers that contained Intel processors.