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ECONOMICS - Coggle Diagram
ECONOMICS
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Arguments for and against progressive taxation as a means of achieving a more equitable distribution of income
Arguments against
If people feel that their hard work is simply going to result in them having to pay a higher rate of tax, they have less incentive to work harder and improve their economic situation
Higher taxes could discourage entrepreneurial activity and even encourage entrepreneurs to leave the country in favour of more “favourable” tax climates
Taxes on interest, dividens and capital gains, which particularly affect higher income earners, could depress saving and the purchasing of stocks and shares, which would deprive financial markets of necessary funds
Arguments for
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A progressive tax structure gives the government the funds to finance its necessary expenditures and also allows for redistributive policies.
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