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
The tax increases encompass a great span of the nation, and can effect every aspect of the business. This makes the purchase of diamonds an inferior act because a consumer does not display as much concern as purchasing diamonds as compared to other goods. For example, an increase in taxes causes businesses to not perform as well as the quarter before. Businesses also are exposed to many different effects in reaction to the increase in taxes. A similar phenomenon would occur for a consumer that participates in buying superior and inferior goods. Another phenomenon that exists with consumers and increased taxes is the depictions of inferior and normal goods. These taxes effect every aspect of the business, and can trickle down to every productive sector of the business. A consumer would be more likely to continue purchasing a normal good such as milk as compared to the inferior good of diamonds. This would decrease the amount of money that is spent on goods and services. Businesses refrain from hiring extra help as much as possible, and many time people refrain from working more. They continue to save the same amount, and continue buying more and more of different goods. The businesses purchase less, and the suppliers of the inventory end up selling less. A company may decide to purchase less of an inventory because of the lack of controlling of costs for that inventory. Another illustration of the effects of taxes on consumers is seen in the saving side of the consumer world. With increased taxes, the consumer has less money to spend on extravagant goods or leisure goods.
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