What are the different types of tax rates?

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2018-03-21 14:26:15

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In the tax system there are different types of bets. They are used in combination to achieve the greatest efficiency. What are the different types of tax rates that can meet modern man? How do they differ? How they affect the tax burden felt by the population? What is the tax rate from the macroeconomic point of view? What is their functionality and leverage?

What is the tax rate?

types of tax ratesFirst is to define the terminology. Thus, the tax rate (rate of taxation with taxes) - the amount of charges that go into one additional unit of database changes. When she expressed to the taxpayer's income in percentage terms, it is called a quota. Bet is a compulsory element of the tax.

Tax burden

types of tax rates regressive videoUnder tax burden to understand the interest level of the ratio of taxes to gross domestic product of the country. In other words, under this concept falls the respect of all mandatory payments to the state GDP. The load can be calculated separately for each subject or in the whole entity (enterprise or wage of the person). To calculate it, you need to use the formula: ULF/D, where VLF – accrued taxes, D – income.

For the underdeveloped countries where there is a strong social security system is characterized by a low tax burden in the developed countries it is very high. For the latter, the example of Sweden, where she is in some years was above 60%. It should also be noted in the article the difference between actual and nominal load. They are useful from the point of view that allow to estimate the degree of tax evasion. So, with the increase in rated load increase in the number of cases of evasion of payments. When it reaches a certain level, the phenomenon of evasion becomes widespread, so the actual situation is changing in the direction of decreasing the money received. When the state receives the highest amount of money, it is considered that the rate is the Laffer point. I try not to walk. We now turn to the main topic and consider the kinds of tax rates. An indirect system of collection of taxes will be considered only in General terms, the focus will be on the line.

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What are the different types of tax rates?

So what kind of diversity exists? Currently uses the following types of tax rates. The list is easier to remember:

  1. Proportional.
  2. Regression.
  3. Progressive.

Each of them has its own characteristics, which will now be considered. There is still a 4th type: solid bet. The point of it is that you install a certain amount of tax who must pay, regardless of income. But owing to lack of economic flexibility now fixed rate is not used at the state level, but only in the form of rent, for instance a ton of oil or iron ore (regardless of profit).

Proportional tax rate

types of tax rates directUnder the action of such a mechanism gets the same part from all types of income. To predict how it will affect people obtain the amount of money I make small calculations. So, from net income subtract mandatory spending that is going on, food, clothing, medical care, housing and transportation. All that will remain (assuming that anything at all will be), make a discretionary profit. It can increase or fall after a change in the existing rates (or introduce new). It should be noted that a proportional tax system is quite inconvenient when applied to the poor. So, 500 rubles from 10 thousand and 5,000 of the 100,000 have a different value for the owners of these sums, so the number of obligatory payments to the state used other types of tax rates. The proportional system is used when working with large business.

Regressive tax rate

what are the different types of tax ratesUnder a regressive tax rate understand this commitment when with the growth of the taxable base decreases the percentage that must be paid from their income. Example implementation: when not fixed a certain part of the obtained profit, a definite amount of money and need to pay. For convenience, the entire income is divided into separate parts. Each of them is subject to his bidding. Therefore, the reduction of the amount of payment is not just for income but for part of it. Regressive tax rate many think it unfair way of taxation, and in its pure form it is a little used. There are more popular types of tax rates. Direct regression is one of the most popular in this category. As a practical example of implementation can allow the unified social tax. So, if you increase spending on wages there is a decrease in the tax rate. This mechanism is designed for withdrawal of wages from the shadow. By the way, about the types of tax rates. Regressive video is here exclusive. As you can see, it is used for motivationcertain actions and is used by States to increase the level of law.

Progressive tax rate

types of tax rates proportionalProgressive taxation is based on income, which are used at their own discretion. The greatest interest is the difference between total assets and spending on priority needs. This principle forms the basis of progressive tax rates. After all, with the quantitative growth of income decreases the total share of funds that go for the normal functioning of the person (to spend on food, housing and other priority payments). And at the same time grow the amount going to the purchase of luxuries or pleasures. This tax rate is the solution of cases, when a less wealthy taxpayer is experiencing a more severe tax burden than a wealthy man. In addition, it is divided into subtypes, which differ in:

  1. A Simple bitwise.
  2. Single-stage.
  3. The relative bitwise.
  4. Multi-stage.
  5. Linear.
  6. Combined.

Options bets

types of tax rates indirectStrange As it may seem, but the tax rate, in addition to their main purpose, performs a number of functions of the economic plan. Some of them:

  1. Rescue the economy from "overheating". Under capitalism there is such a negative phenomenon as periodic systemic crises that bring down part of the economic sector of the country. The growth of the economy in terms of low tax rates in the greater volume of the saturation of the market. And when you reach the threshold of the crisis will fall to the “higher”. To avoid this, governments are pursuing a policy of increasing the tax burden, to reduce the speed and intensity of market saturation.
  2. The Regulation of trade flows. The fact that any infrastructure has a limited capacity of use. And if the load approaches the maximum, it is possible to increase the transport or transit taxes to indirectly affect this situation, and additionally to replenish the state budget.

The Impact of rates on the economy from the macroeconomic point of view

Types of tax rates listState as a reason for establishing of the tax can use anything, ranging from income redistribution to create justice and ending with the elimination of negative external economic effects. And in order to better conduct its policy and to achieve maximum efficiency, is used as a tool rate. It should be noted that from the macroeconomic point of view, its reduction encourages the growth of aggregate demand of the citizens and at the same time motivates entrepreneurs to increase the total offer. It follows from this regularity: the less citizens have to pay taxes and the lower rate on them, the more can be spent for consumption and acquisition of new products. This creates a cycle of increasing activity in the economy, which, while not infinite, can have a positive impact in the shortest run for a period of several years. The principle use of the state at carrying out of stimulating economic policy. If you increase the tax rates of firms and enterprises are forced to raise prices, lose market share and reduce its presence. Thus, the transition to the cycle of reducing growth. You may notice that the reduction in aggregate supply in the market is inversely proportional to the size of the tax rate. Such dependence was described in the economic adviser of US President Ronald Reagan, Arthur Laffer, who became the founder of the theory of “economy”.

Conclusion

To summarize, we can say that at the moment there is no universal tax rate which could be applied anywhere. Perhaps it will be developed in the future. Anyway, now we have only what is.


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Alin Trodden - author of the article, editor
"Hi, I'm Alin Trodden. I write texts, read books, and look for impressions. And I'm not bad at telling you about it. I am always happy to participate in interesting projects."

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