Tax+Reform+By+Kaizer+K.+Rodrigues

=**__Tax Reform__**=

//A tax reform is a situation where the collecting and management of tax is changed to fit to the ecnomic conditions of the time.The government will often manipulate the level of taxes in order to boost aggeregate supply, for example, enocuragement in further investment in capital would lead o an increase in the nations productive capacity, ie. an encouragement for firms operating to increase productivity. The government aims to improve ecnomic conditions by reducing costs for those who operate within its economy (better supply conditions for firms) by introducing forms of change. These forms of change are, Tax cuts, Tax concessions and Reducing compiance costs for businesses.// //﻿// //Tax concessions help businesses to reduce effective tax liability by claiming inflated tax deductions which support them for investment in other assets or activities. Investments in such assets assists the government into resource allocation. The R&D tax concession is a prime example of a tax concession, which supports firms in investing in innovative products, services and procedures which increase levels of aggeregate supply and hence help increase Australia's roductive capacity. It also gives investors confidance as they receive an a + 100% tax deduction. A modern example of the use of R&D tax and its benefits would be, Expanding access to the 175% R&D tax concession in 2008 increased levels of innovation and international competitivness, hence increased productivity which lead to an increase in Australia's productive capacity.//
 * __What is a Tax Reform?__**
 * __Tax concessions (change number one):__**

__**Tax Cuts (Change Number two):**__ //Tax cuts can also be considered tax concessions but cuts involve a reduction in the rate of tax. Tax cuts are much more permanent in nature and not tend to focus on particular types of investments. A company tax rate would help encourage the company to increase investments although a 175% R&D tax concession would focus upon a particular form of investment such as reasearch. reduction in company tax rates would help aggeregate demand to increase as levels of investments will tend to increase in terms of capital and all other elements involved in the production process. This will lead to an increase in the productive capacity of the nation and hence demand for goods and services would ought to increase once these investments are operational in the industries that they belong to.// //Tax cuts also assist in the increase of aggeregate supply especially by lowering income tax rates:// //A good exaple of a tax cut recently is, " The company tax rate will be reduced to 29% from the 2013-2014 incme year.// //Tax cuts affect on inflation clearly depends upon the demand in the market as it could be either higher or lower than the supply.// //There are not just taxes for running an interprise,there is the burden of complying with the extensive tax legislation. These costs can be incredibly high and hence the government focuses on reducing the burden more in order for businesses to run more effectively and efficiently. For example in July 2007 small business were futher reduced via a number of other initiatives, such as the ability for these businesses to adopt a simplified accounting method for GST calculation. Some other methods in which the Federal Government involve the reduction in customs and duties, excise taxers, the GST or petroleum resource rent tax, in order to boost levels of aggeregate supply and to better conditions for Australian businesses.//
 * //labour productivity levels and aggeregate supply levels will increase as workers will have more disposable income due to having more income after tax, performance based occupations will tend to have higher levels of prodctivity as workers wll be willing to spend longer and to work harder to receive more income.//
 * //Levels of labour will tend to increase as it is much more rewarding to work, hence levels of immigration will increase which would assist in lowering the unemployment rate and increasing levels of aggeregate supply.//
 * //There would be lower levels of labour costs and therefore production will be more financially effecient.//
 * //Unincorporated firms will tend to have more confidence in the expansion of their business as they would tend to having more disposable income levels of investment and productivity shall boost.//
 * __Reducing Compliance Costs For Businesses (Change number 3):__**

//The recently introduced carbon tax policy is cosidered to be a type of tax reform. The carbon tax is going to have a major affect on tax cuts and concessions, it has negatives and positives depending upon the level of the individual's financial position and anual income.//
 * __Carbon Tax A Modern Reform:__**

//Annete Sampson from The Age delivers a simplified explanation of this new policy and its fucntions in her article " Carbon Tax Explained" - July 20 2011.// //In her article Annete explains that the carbon tax would reduce the rate of tax return over the next few years. It would be easier to receive a good lump sum if the individual earned less than $80,000 per anum. There would be percentage drops in the rates of cuts but the real benefits will be individuals who will be assisted by welfare and allowance policies.// //The Federal Government is aiming to make Australia a cleaner and greener environment and thus are increasing the taxation on goods and services that are polluting. By doing so aggergate demand for green energy and environmental products will ted to increase and aggeregate demand for carbon emmiting goods and services will decrease. Although for high income earners it will be easier to live according to espensive standards and hence they can afford to make transactions on goods and services with a carbon tax, hence the tax cut for any earner of more than $80,000 per anum will be quite low. For average or low income earners the government will keep a higher level of tax cuts than thoe who are high earners in order for low earners and welfare earners to be able to survive more effeciently.// //This form of reform helps keep the inflation rate low as aggeregate demand for majority of the products will reduce since they now consist of a tax.// =//Figurs showing the percentage changes:﻿//=



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