FEDERAL TAXATION OF GOODS

Federal taxation of goods

Federal taxation of goods

In today's world, the majority of our government's income comes from taxation. Taxes are required payments of money to various local, states, and federal governments, and they are used to provide public goods and services to benefit our communities. The government uses the income it receives from the taxpayers to provide us with proper infrastructure and social services for little or no cost at all. These services include Medicare, Social Security, education, highways and road maintenance, defense, justice system, police, etc (Institute on Taxation and Economic Policy. 2005. pp 3). Taxes also fund programs and services that benefit only certain citizens, such as health, welfare, and social services. In many third world countries where taxation is low or does not exist, all of these services come out of one's pocket, unlike the United States where these services are granted to us at no cost.

When taxation is mention, eyebrows are raise, not just here in the United States but in most countries globally, especially those countries of which participate in international trading of good. Taxation is definitely an involuntary fee paid to the government from individuals with business or private citizens. Taxation has become a hot discussion in the theories of economist and even in political parties. Taxation has three legitimate legal divisions, which is the local, state and the federal taxation of any good.

Local taxation is not levied on producers as it levies more on consumers. Most local taxComes from the property of resident citizens' p. Sales and income tax is included. Some States here in the United States collects not just from residents but also from non-residents who works in that city. Less is demanded due to any increased that is made through local taxation as suppliers may not be able to make sufficient quantity as the cost may be to high. With the quantity demand down the equilibrium would be increased. Tobacco or alcohol is two common goods where taxes are high mainly to reduce the usage of the product but also for revenue. Looking at the imposition of the price ceiling or floor on a product like sugar. The price floor on this is in subsidies so if the price is above the price floor there will be no real effect as the market is already in demand. The sugar programs essentially a producer cartel run out of ...