The main reason that a government imposes a tax on fossil fuels is to try and correct for the negative externality (pollution) which is produced when they are consumed. Without the tax there would be a market failure as car owners would be over consuming petrol as they are not being charged for the damage to the environment. There are 3 key aspects to this question which are; those that lose from a reduction, those that gain from a reduction and finally at what level the overall price for petrol was before the tax reduction. The major argument for maintaining the level of taxation on petrol and diesel is to protect the environment. When the social costs of consuming a good are higher than the private costs, there is said to be a negative externality.
To begin with, raising the tax will bring in more money to the government from since demand is inelastic for cigarettes and people will keep on buying them. The extra amount of income could be used to help the well being of the country and to provide more public goods. Also, cigarettes are a demerit good, a good which is considered unhealthy or damaging in some and can be physically harmful to the consumer and other surrounding, so when price increases, demand will fall. Even if it is a small fall in demand, it is most likely to be for the young smokers to demand since they have less income than adults. If more young smokers quit, the healthier the next generations will be since smoking is a main reason behind a lot of health issues including lung
The theory is that jobs are lost when we are tempted by cheap foreign goods. The true effect of protectionism is it reduces consumer choice, raises prices of protected foreign products and domestic goods. This lowers worldwide production and may save some jobs in a specific industry within America but this comes at an expense of the total welfare of the country. Free trade would provide lower prices, higher-quality goods, economic growth, and competition. This policy eliminates competition and competition is needed for a balanced economy.
This is because if the government decides to increase taxes then the general public would have less money to spend on the electronic equipment. This would then affect on my profit margins as I will have to keep reduce the prices of the products so that I don’t lose any customers of my
The NHS will also suffer from the negative externalities created as smokers who were reliant on therapeutic gum will now be suffering the effects of smoking again. Another intervention can be information provision which can be provided through the medium of social media, television advertising and radio. This will correct the information failure, and can be used in conjunction with tax to increase the effectiveness. However it does not provide an instant effect do it does not solve the short term problem. There is also a large amount of information needed for it to be effective.
However, it could be argued that since tobacco lowers life expectancy and causes diseases, tobacco costs considerably more than it should to the taxpayer. Tobacco indirectly costs the government considerable amounts of money in healthcare, all which come from the taxpayer’s pocket; were these to be reduced, taxes may be reduced as well, benefiting individuals and the overall economy. It is my personal belief that although tobacco should not be banned, restrictions should be placed. Tobacco used for medicinal and therapeutic purposes should remain in place and continue to be produced; however, an additional tax should be placed on those who smoke recreationally, in order to discourage this
“The most important provision of this act however is the prevention of anticompetitive mergers. This occurs when a company buys a competing firm. While most mergers allow the companies to create better quality goods at less expensive prices, some mergers limit competition and make price fixing easier. This part of the act was designed to prevent mergers from creating monopolies” (Ellsworth, 4). This section of the Clayton act wanted to promote free trade and keep smaller businesses from getting too greedy.
Lowering taxes can also leave money in citizen’s pockets but it also takes away from the amount of money the government is able to use to stimulate the economy by spending. When the government increases spending it forces the demand to go up, if taxes were lowered citizens will still have the choice to spend
As with every argument there are two sides, while the reusing and revaluing of rubbish has positive effects on society economically and creating a healthier and more sustainable environment, sometimes getting materials to this stage can have detrimental effects. Countries that we send our rubbish and waste to, to dispose of are suffering from greater pollution. Vulnerable workers on very low pay are being used in this operation,
It is true that corporations and consumers receive the benefits of cheap labor, but to facilitate stability, taxpayers must cover the infrastructural cost. Notwithstanding all the negative ramifications, illegal aliens do raise the general effectiveness of the U.S. economy by adding profitable contributions via taxes and hence diminishes marginal cost for total product production. Though this topic is important, there are more significant topics (i.e. automation in manufacturing or the growth in global trade) that will have more impact on the U.S.