Understanding Economics

From as long as I could remember Taxes have always been away of our daily lives. Taxes can often be a big burden for most, they can also be a help and used for many early(a) functions. If it was not for evaluateation our roads, public buildings would be a complete mess. Our emergency services such as, law enforcement, EMT, and Fire/rescue thrive off of tax dollars, many of our healthcare offices also use tax payers currency to stay open. The taxing process from distribution to collecting them has people on the fence with several(predicate) point of views.In this paper I will be discussing the questions summation about taxation. What happens to net ad hominem income when the governing body raises taxes? When the presidential term raises taxes, it will decrease your net personal income. As the organisation raises taxes, most peoples net personal income will decrease, which means that their useable income decreases as well. When this happens people tend to spend less(prenomi nal) money only to avoid going into debt, which will soon affect the markets income because they are no longer buying goods and services with their disposable income.This problem will eventually perish to a decrease in total tax revenue as the gross incomes of the population can drop. When the government lowers taxes? When the government lowers taxes people feel more comfortable with spending more of their money. Lower taxes allow the population to buy more goods and services because they know that their money will go a long way. The lowering of taxes along with a controlled government over looking spending will have a fast-flying and positive effect on the deliverance. People spending more money will not only stimulate the economy, but will eventually lead to more jobs.Lower taxes equals happy people and a better economy. How is GDP affected by higher taxes and Lower taxes? The Gross domestic product (GDP) is affected when the government brings in more taxes then they spend, red ucing disposable income and slowing the growth of the economy. That is when Fiscal policy comes into place causing some type of stabilization to the economy along with higher taxes. According to E-how, Tax cuts mean more disposable income for individuals and more retained earnings for businesses. The impact on the GDP depends on what individuals and businesses do with the extra cash.If households buy more goods and businesses increase hiring and capital equipment purchases, the GDP will increase. A reduction in taxes also means less revenue for the government at all levels, which generally leads to lower government spending, higher deficits or both ( eHow. com, 2012). What other economic factors are affected when taxes are raised or lowered, and how are they affected? Other economic factors that are affected by the rise and get downing of taxes are, sales tax, healthcare, and major government programs.When sales tax is raised it puts a financial strain on employers and individuals , and will result in job loss. Healthcare services thrive off of the rise in taxes and when taxes fall they suffer tremendously. Low income families depend on these services and without the proper funds. Government programs are affected when revenue result in increased taxes. When this happens, these government funded programs has to increase their budgets. Once funds start coming in slowly then these programs such as, military, FBI, Medicare, Medicaid, , and social security, once taxes are increased these programs are able to maintain.In fiscal year 2009, state governments spent 40 percent of their budgets on K-12 and higher education and 26 percent of their budgets on social programs such as Medicaid, transportation, corrections and public assistance. Funding for the following programs increase as tax revenues increase (eHow. com, 2012). Should the government increase tax rates on everyone as a way to equalize incomes and wealth? No, the government should not raise taxes on every one, only for those who are extremely wealthy like Earvin Magic Johnson, who is worth $700 million.The shopping centre class are going to suffer from the tax increase. This is a political problem that will cause more headaches for everyone and will probably end with the nerve centre class paying more in taxes. Now we know that taxes will make or break things in this nation, and will cause a cover of debates amongst government officials. Taxes will be around forever and we have to get use them changing, I have discussed the questions about the taxing process and I rely you will take something from it.