微观经济管理学与财务知识分析2.ppt

Taxation and Government Intervention Chapter 7 Laugher Curve Two economists meet on the street. Q. How’s your wife? A. Relative to what? Taxation and Government Most people dislike taxes. For government to operate, it must tax. For the market to work, it needs government. How Much Should Government Tax? In order to answer this, we must know the costs and benefits of taxation. How Much Should Government Tax? From previous chapters we know that government’s roles include: How Much Should Government Tax? From previous chapters we know that government’s roles include: The Costs of Taxation The costs of taxation include: The direct cost of the revenue paid to government The loss of consumer and producer surplus caused by the tax The cost of administering the tax codes. See Figure 7-1. The Costs of Taxation When government raises taxes, there is a loss of consumer and producer surplus that is not gained by government. The Costs of Taxation Graphically the deadweight loss is shown on a supply-demand curve as the welfare loss triangle. The Costs of Taxation The Costs of Taxation There are other costs of taxation. The Costs of Taxation Payroll accounting has become so onerous, businesses large and small often pay payroll-accounting firms to keep up with changing federal and state payroll rules and actually issue paychecks for their clients’ employees. The Benefits of Taxation The benefits of taxation are the goods and services that government provides. The Benefits of Taxation Some of these benefits are the part of the basic institutional structure of a market economy that allows it to work efficiently. The Benefits of Taxation Still others benefits take on the qualities of a public good – national defense, for example. The Benefits of Taxation Others benefits are provided for reasons of equity or because they provide positive externalities. The Benefits of Taxation The policy debate about the benefits of taxation generally focuses on goods that could be supplied by the ma