What Happens to Economy When Goverment Raises Taxes

While should the government increases tax rate on everyone as a way to equalize incomes and wealth? It would make it easier for many people and make it fair for the poor and middle class citizens. Government officials that are elected are there to take care of policies and programs. Because when Gross Domestic Product( GPD) taxes increase spending and receipts rise and the government and the budget from surplus to a increase, when Gross Domestic Product taxes (GPD) reduce spending and receipts decline and the move of government budget from surplus toward a deficit.

Therefore, elected officials are over seers of the policy’s to make sure that the taxes stay fair for the people. (Brue, (2010). ) Even though should the government increases tax rate on everyone as a way to equalize incomes and wealth? It would make it easier for many people and make it fair for the poor and middle class citizens. Government officials, are chosen is there to take care of policies, and programs.

Because when Gross Domestic Product (GPD) taxes increase spending and receipts rise and the government and the budget from surplus to a increase, when Gross Domestic Product (DPD) taxes reduce spending and receipts decline and the move of government budget from surplus toward a deficit. In addition, elected officials are over seers of the policy’s to make sure that the taxes stay fair for the people. (Brue, (2010). ) First, Government officials are selected are there to take care of policies and programs.

For the reason that while, Gross Domestic Product (GPD) taxes increase, spending, receipts rise, the government, and the budget from surplus to an increase. (Brue, (2010). ) The idea of indirect taxes may seem a bit odd. Clearly, we pay income taxes, social security taxes, and state and federal taxes. However, we also indirectly pay taxes included in the price of everything we buy, and even in contributions, we make. Some of these taxes are obvious, like gasoline taxes and sales taxes, are buried, converted in the price of the product we buy, because the business pays various taxes, and considers these taxes in figuring its overall pricing.

Even if we contribute, say to a church, part of that contribution will go to pay the taxes of the employees of the church. The figures I show are for the US. I expect that the European countries with all of the current debt problems would likely have similar or worse values, if calculations were done for them. I think the way GDP is calculated today misses many of the linkages as to what is really happening. I know my model is not exactly right–but I hope it gives some insight as to what is really happening, as oil prices and the credit markets interact to affect the economy.

As I look at this model, one question comes up: “What if a similar oil price run-up occurs again, followed by more recession, and even more reduction in lending? ” Governments are already spending far more than they take in. The high spending already in place, and the large gap between revenue and expenditures, makes it clear that there is not much room for a repeat stimulus program. The next time around could be much worse! (Treberg, 2010) Additionally, when Gross Domestic Product taxes reduce spending and receipts decline and the move of government budget from surplus toward a deficit.

Generally, if the average person gross income stays the same and the government raises taxes, it decreases your net personal income. On the macro scale, as government raises taxes, most people’s net personal income decreases, which means their disposable income also decreases. Since their disposable income decreases, they spend less (unless they want to just get deeper in debt), which further decreases the gross income of those they buy goods and services from with their disposable income.

This can actually lead to a decrease in total tax revenue as the gross incomes of the population can drop a greater percentage than the increased percentage of the taxes; 40% of $80,000 is only $32,000 while 35% of $100,000 is $35,000. Finally, the most important reason Government officials are elected are there to take care of policies and programs. Is Elected officials are over seers of the policy’s to make sure that the taxes stay fair for the people. All of this argues against any form of fiscal austerity just now.

Even some deficit hawks warn that immediate tax increases or spending cuts could push the economy back into recession. Far better to pass a plan that phases in spending cuts or tax increases over time. (business/economy/, 2011) Indeed, while should the government increases tax rate on everyone as a way to equalize incomes and wealth? It would make it easier for many people and make it fair for the poor and middle class citizens, Government officials are elected are there to take care of policies and programs.

My concern is if we continue to raise taxes how do we get out of debt and why do the government and polices, they make help them and not the poor? It seems that the poor that have nothing have to keep paying for the rich. Why can’t it be fixed?

So, that the wealthy help the poor more? I see if they would help the deficit, we as American citizen would not be where we are today. That is if the wealthy would give and get us out of the deficit we have today. Works Cited Brue, S. L. -H. ((2010). ). Essentials of economics (Ashford Custom 2nd ed.).

In S. L. Brue. New York: Brue, S. L. , & McConnell, C. R. (2010). Essentials of economics (Ashford Custom 2nd ed. ). McGraw-Hill/Irwin. business/economy/. (2011, 07 03). Retrieved from http://www. nytimes. com: http://www. nytimes. com/2011/07/03/business/economy/03view. html Treberg, G. (2010, 11 29).

Our Finite World. Retrieved from http://ourfiniteworld. com: http://ourfiniteworld. com/2010/11/29/is-it-possible-to-raise-taxes-enough-to-fund-stimulus-programs-what-does-the-oil-connection-say/.