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All you need is : – baking soda (sodium bicarbonate) – lemon – toothbrush
Taxes matter: they have an effect not only on who bears the burden of paying for government
expenditures but also on the level of economic activity and incomes in a country.
Moreover, tax policy reflects social concerns as well as economic choices, such as how the
burden of tax is spread over income classes, and how taxes are used to influence personal
choices (about everything from saving, labour supply, and investment to the consumption
of alcoholic beverages and the preservation of traditional activities, such as farming).
Taxes have a powerful effect on the behaviour of individuals. Indeed, taxation is perhaps
the principal means by which modern governments influence the lives and economic wellbeing
of their citizens; it is therefore a central feature in political and economic debate.
The study of tax policy reflects some notable difficulties. It is necessary to determine
the short- and long-term economic effects of different tax alternatives in order to assess
which system will maximize economic well-being, output, and incomes. But because the
taxation system is used for many non-economic purposes, it is also necessary to consider
how the system meets citizens’ preferences about non-tax issues (such as health and education)
and how much these preferences cost. Further, the tax system itself is used to distribute
social welfare subsidies and grants. And, above all, in a democracy the tax system must
be fair and be seen to be fair.
An important issue to note at the outset, and one discussed in the landmark Report of
the Royal Commission on Taxation in 1966, is that ultimately the tax burden in a country is
borne by its residents.1 Taxes may be paid by corporations, trusts, and other entities, but
these entities do not ultimately bear the burden of taxes; instead, they can only pass on
the burden to others in the form of higher prices for goods, lower returns for labour, and
lower capital inputs. In the end, and bearing in mind the relatively minor exception of
taxes that may fall on non-residents, the weight of domestic taxes is borne, in one way
or another, by the individuals in a country.

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