June 15, 2024

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The Functions of the Tax System

The Functions of the Tax System


The primary function of the tax system is to finance public services and incometo. This must be done fairly and so that the economy works side effects are kept to a minimum. Businesses and economies are constantly making a variety of long-term economic choices. Because tax policy should also be consistent and predictable. These goals are universally valid, but the problem of the sustainability of Finnish public finances stresses their importance.

The Central Principals for You

Are these principles reflected in the tax policy pursued in recent years? Too bad yes, they are not reflected. There seems to be much room for improvement. Un-consistency has characterized action in this policy area. It has been used new tax subsidies while raising tax rates. It has been canceled changes in the law shortly after their entry into force and many reforms have been hasty and superficial preparation. The discussion also highlights short-term effects on tax revenues and income distribution, even if justified expects the reform to affect the performance of the economy as a whole.

The Truest Solutions With the Best Data for Taxes

We believe that economic research data should play a stronger role in the preparation of tax policy and in the whole public tax debate. Here it is good opportunities, as economics has made the fastest progress in tax matters. In addition, numerous reviews provide up-to-date estimates of taxation effects and good tax policy. The use of the small business tax calculator would be quite supportive in this case.

  • The aim of this report is to bring about a debate based on economic research within reach of the readership. We look at how taxation affects household and business behavior and we consider how these results can be taken into account in the development of Finnish taxation. We also seek toot the perceptions in the public debate that we believe there are can be repaired. The aim is to write the report as widely as possible. At the same time, however, it has sought to follow the view of economics in tax the effects of the application.

The Perspectives

The aim of the article is also to highlight the themes and perspectives that we believe are too little on display in the domestic tax debate. The priority is not tout explains the concept and mechanisms of action. In several however, we also look at development options. The report is not comprehensive in the sense that it would go through all the small ones the forms of taxation and conceivable decision-making situations that may be affected by taxation.

However, the report addresses the main forms of taxation, such as income tax and consumption taxation and the main behavioral effects associated with it. Here-With this in mind, the report covers a wide range of tax issues. For example, municipalities financing, the overall level of taxation or the income transfer system. Issues are not addressed. The report also does not describe the tax treatment of different forms of taxation.