Is fiscal drag, really just a stealth tax? скачать в хорошем качестве

Is fiscal drag, really just a stealth tax?

Fiscal drag occurs when inflation / growth of income, pushes businesses and individuals into a higher tax bracket. This increase in taxes, reduces demand and spending. A larger portion of money now goes into paying taxes, which leads to a "drag" on the economy. Some experts refer to fiscal drag as a stealth tax. Fiscal drag affects individuals and businesses. For individuals, there is reduced disposable income, and for businesses, there is less cashflow available for supplementary activities, like research and development. Governments do get additional revenue in the process and are able to pay off public debt. However, it can also work against the government, dragging middle income earners into a higher tax bracket, leading to an unhappy population. At an individual level, people should think carefully about their pension contribution, professional expenses, charitable giving and understand the effects of fiscal policy on personal finances. At the Government level, there needs to be a frequent review of thresholds, in order to maintain an equitable taxation system.