Should the Government Intervent Tax Essay Example | Topics and Well Written Essays - 750 words

Should the government Intervent Tax - Essay theoretical accountHence the government, in my view, should intervene through tax rates to victuals the economy and society prevailled.Government intervention through tax rates is of paramount importance when negative externalities are to be dealt with. The commercialize consists of two types of goods, open and private. Private goods are associated to the concept of excludability, referring to the exclusion of people from the benefits of a product or service that do not pay for it. On the other hand, public good is non-excludable and benefits the entire tribe regardless of their non-payment. Free-riding issue arises in this situation leading to chaos and dissatisfaction toward those counterparts of the society who are not bring enough to the society compared to the benefits they are receiving (for instance healthcare and security/defense facilities for tax-evaders or unregistered immigrants in some cases). Institute on Taxation and Economic Policy (ITEP) has contributed to the knowledge by revealing that undocumented immigrants can be a major source of tax earnings if they are permitted legally to play in the US and would end up increasing the tax contribution by about $2 billion per year (ITEP, 2015).Government must intervene by changing tax rates to control consumer demands. By increasing tax rates, the government may reduce the disposable income and hence reduce the consumer demand. Similarly, if it wants to growing consumer demand, generally or specifically for certain goods and services, subsidies can be provided and/or tax on that especial(a) product/service can be reduced. Hence, tax rates on specific products, services or industries as well as taxes on individuals and specific population groups can both help governments to keep harmony in the economy.The government calls funds from the local economy by taxing general public and businesses. These funds are then