...THE ECONOMICS OF TOBACCO TAXATION IN INDIA Tobacco taxation in India tends to be low for the most commonly consumed tobacco products. In order to suggest ITC about their strategy for the rural market, we must understand the taxation policies that prevail. India has a tobacco tax structure which is complex, different taxes for hand-rolled versus machine-made bidis, etcetera. In the table given, we observe that bidis are taxed less than filtered cigarettes. At the same time, the tax remains constant for bidis whereas it increases for cigarettes. In table 3.5, we observe that cheaper the tobacco, higher the tax because we assume that cheaper tobacco is more hazardous. But for bidis though the cost is cheap, it is taxed less as it focuses on the mass consumer whose buying potential is less. So its demand is more elastic than the expensive tobacco. Considering the data given in table in 3.1 and 3.5, tobacco products like bidis are less taxed, and it caters to the needs of majority of the consumers. Cigarettes and bidis are consumed by classes of people from different economic strata. Rural markets have a potential for bidis since the lower income group resides more in rural areas. The taxation on bidis is almost constant through the years, it is more profitable to enter the tobacco market through bidis in rural areas.. Own price elasticity in rural areas for bidis is more elastic than in urban areas. For example, an increase of 10% in price will decrease the quantity...
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...Indirect Tax Indirect taxes include value added tax, a range of excise duties on oil, tobacco and alcohol and fuel duty. VAT is levied on the sale of goods by registered businesses. Businesses add VAT to the price they charge when they provide goods and services to business customers - and non-business customers. There are different VAT rates, depending on the goods or services that are being provided. At the moment there are three rates: standard rate – 20%, reduced rate - 5 %, zero rate - 0 %. The standard rate of VAT is the rate that's charged on most goods and services in the UK. Some examples of reduced-rate are domestic fuel and power, energy-saving material and children's car seats. The examples of zero-rated items are food, books and newspapers, children’s clothes and shoes, public transport. Excise duty is paid on alcohol, tobacco and fuel. This is paid on top of VAT and UK is high relative to most EU countries. These taxes are levied by the government for a number of reasons – among them as part of a strategy to curb pollution and improve the environment. Some of the reasons for using indirect taxes should be briefly mentioned. Indirect taxes may assist in the redistribution of income, though various unfortunate side-effects were existed. Also, indirect taxes may be able to correct for market imperfections, such as the effects of monopoly on the supply of particular goods and the existence of externalities ignored by producers. In addition, where people...
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...Explain the relationship between the price elasticity of demand and total revenue. What are the impacts of various forms of elasticities (elastic, inelastic, unit elastic, etc.) on business decisions and strategies to maximize profit? Explain using empirical examples. The consumers and producers behave differently. To explain their behavior better economists introduced the concepts of supply and demand. In short words, the law of demand states that with price increase quantity demanded of a good or services decreases, and the law of supply states that quantity of a good produced increase if the market price of that good increases. Of course, it is just general rule and does not explain all varieties of factors impacting the supply and demand model. There for, the quantitative measurement such as elasticity was introduced to provide more detail about market behavior. Price elasticity describes what happens to the demand for a product as its price changes. If the prices for the product rise the demands will decrease. Price elasticity of demand tells us how much the quantity demanded decreases. It is important topic in economic. Market is always changing and if price for the product will change elasticity tells us how much other things will change. The relationship between price elasticity and total revenue is important. Based on analysis of elasticity management will determine the necessary changes on pricing policy for goods and services. To maximize company’s revenue the...
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...economic environments. Demand * How is the business influenced by the following in each economy? * Affordability of the products * competition * Availability of substitute products * Level of GDP * Needs and aspirations of consumers Supply In each economic environment: * How is the business influenced by the availability of raw materials and labour? * What logistics are available to the organisation? * Does the business have the ability to make profit? * What competition is there for raw materials? * Is there any government support available? Changes in supply and demand For each economic environment: * Draw the supply and demand curves for the selected organisation * Describe the elasticity of demand * Describe the price sensitivity of the products and raw materials * Describe the influence of branding on price sensitivities. Global interaction * How interdependent are the two economic environments in which the businesses operate? * How do the different supply chains interact? * How is...
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...ECO/365 Final Exam v.4 | User | 9020019679 | First Name | LORETTA | Last Name | LUCERO | Confirmation # | 23611188 | Score | 50 | Total Questions: | 30 | Total Correct | 15 | Start: | 5/29/2013 12:48:13 PM | End: | 5/29/2013 1:11:00 PM | Here is some additional information on items you missed: Topic: Differentiate between macroeconomics and microeconomics. Question: A basic difference between microeconomics and macroeconomics is that microeconomics | Topic: Analyze the effect of changes in supply and demand on the equilibrium price and quantity. Question: The distinction between supply and the quantity supplied is best made by saying that | Topic: Determine how elasticities affect pricing and purchasing decisions. Question: Price elasticity of demand is the: | Topic: Analyze the relationship between productivity and the cost of production. Question: Other things being equal, when average productivity falls, | Topic: Analyze the effect of changes in the supply of and demand for factors of production on the price of inputs. Question: A firm's demand for labor is derived from the | Topic: Analyze the effect of changes in marginal revenues and costs on a firm’s profit-making potential. Question: Owen runs a delivery business and currently employs three drivers. He owns three vans that employees use to make deliveries, but he is considering hiring a fourth driver. If he hires a fourth driver, he can schedule breaks and lunch hours so...
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...Helpsheet GOOD WRITING PLANNING & DRAFTING YOUR FIRST PAPER Use this sheet to help you: • understand the 5 main steps of writing • preparing and planning to write an essay or report 5 minute self test Consider the following questions before reading the helpsheet: • What are the five typical stages involved in completing an assignment or report? • What are directive words? Name three commonly used directive words used by lecturers in setting assignment questions? • How is “brainstorming” used in assignment preparation? • What’s the difference between a mind map, concept map and spider diagram and how can they be used in assignment preparation? • List some words and phrases commonly used in sequencing paragraphs in assignment writing? • How does one write an argument in an assignment? • What do you need to consider when editing an assignment? • What’s referencing? © The University of Melbourne 2010. These materials were produced by the Teaching and Learning Unit, University of Melbourne. The University of Sydney has reproduced these materials under licence from the University of Melbourne. Helpsheet GOOD WRITING Good writing is writing that effectively conveys to another person what is in a writer’s mind. In any profession, writing is very important, even in the professions that are not traditionally associated with writing, you will have to communicate with colleagues and clients. The value of writing is that putting something down on paper forces...
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...Chapter 1 Introduction Multiple-Choice Questions 1) Which of the following is an example of how the question of "what goods and services to produce?" is answered by the command process? A) government subsidies for affordable housing B) laws regarding equal opportunity in employment C) government allowance for the deduction of interest payments on private mortgages D) government regulations concerning the dumping of industrial waste Answer: A 2) Opportunity cost is best defined as A) the amount given up when choosing one activity over all other alternatives. B) the amount given up when choosing one activity over the next best alternative. C) the opportunity to earn a profit that is greater than the one currently being made. D) the amount that is given up when choosing an activity that is not as good as the next best alternative. Answer: B 3) In a market economy, which of the following is the most important factor affecting scarcity? A) the needs and wants of consumers B) the price of the product C) the degree to which the government is involved in the allocation of resources. D) All of the above are equally important. Answer: A 4) Which of the following is not considered by economists to be a basic resource or factor of production? A) money B) machinery and equipment C) technology D) unskilled labor Answer: A 5) Select the group that best represents the basic factors of production...
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...under oligopoly: a comparison of policy approaches 2.8 The incidence of income tax on wages and labour supply 2.9 The incidence of personal income taxation: evidence from the tax reform act of 1986: 2.10 Tax incidence when individuals are time-inconsistent: the case of cigarette excise tax 3. Conclusion References 1. Introduction: Government generally collect taxes to generate revenue and question arise here is that after imposition of taxation, which group will bear the tax burden. After implementation of tax, there would be the division of tax burden between byres and sellers which is known as tax incidence. Tax incidence is linked to the price elasticity of demand and supply. If supply is more elastic than demand then the tax burden falls upon the buyers and when the demand is more elastic than supply then the producers will bear the cost of the tax. Tax incidence is basically the analysis of the effect of taxation on the distribution of economic welfare. Tax incidence expose that which group either consumer or producer is going to pay the price of new tax and it falls mostly on the group that has the inelastic price quantity or respond least to the price. Tax incidence or the tax burden does not depend on that where the revenue is collected but it depends upon the elasticity of demand and supply. The purpose of this review on the literature is that to...
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...(1976) 55-75. 0 North-Holland Publishing Company THE DESIGN OF TAX STRUCTURE: DIRECT VERSUS INDIRECT TAXATION* A.B. ATKINSON University of Essex, Wivenhoe Park, Colchester, England J.E. STIGLITZ Stanford University, Stanford, CA 94305, U.S.A. Revised version received February 1976 1. Introduction The recent literature on optimal taxation may be seen as attempting to clarify the structure of the arguments advanced to support changes in the tax system, tracing the implications of taxes and quantifying (analytically) the trade-offs between the various objectives of tax policy. This literature has examined the optimal structure for particular types of taxation taken in isolation, such as the optimal rates of excise tax and the optimal income tax schedule. Our purpose, on the other hand, is to provide a broader framework and to consider the interaction between different kinds of taxation. To illustrate this, we reexamine the age-old question of direct versus indirect taxation and the relationship of these taxes to the goals of efficiency, vertical equity and horizontal equity. After describing in section 2 the general framework of the analysis, and arguing that any treatment of the choice of tax structures must be centrally concerned with distributional considerations, we begin in section 3 with the extension of the classic Ramsey formula for optimal excise taxation to include vertical equity objectives. This was considered by Diamond and Mirrlees (1971), but the results ...
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...TAXATION PAPERS WORKING PAPER N.33 - 2012 Serena Fatica Thomas Hemmelgarn Gaëtan Nicodème The Debt-Equity Tax Bias: consequences and solutions Taxation and customs union Taxation Papers are written by the staff of the European Commission's Directorate-General for Taxation and Customs Union, or by experts working in association with them. Taxation Papers are intended to increase awareness of the work being done by the staff and to seek comments and suggestions for further analyses. The views expressed in the Taxation Papers are solely those of the authors and do not necessarily reflect the views of the European Commission. Comments and inquiries should be addressed to: TAXUD TAXATION-PAPERS@ec.europa.eu Cover photo made by Milan Pein Despite all our efforts, we have not yet succeeded in identifying the authors and rights holders for some of the images. If you believe that you may be a rights holder, we invite you to contact the Central Audiovisual Library of the European Commission. This paper is available in English only. Europe Direct is a service to help you find answers to your questions about the European Union Freephone number: 00 800 6 7 8 9 10 11 A great deal of additional information on the European Union is available on the Internet. It can be accessed through EUROPA at: http://europa.eu. For information on EU tax policy visit the European Commission's website at: http://ec.europa.eu/taxation_customs/taxation/index_en.htm ...
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...ECO 450 Week 11 Final Exam Part 2 Purchase here http://devrycourse.com/ECO%20450/eco-450-week-11-final-exam-part- Product Description Question 1 Most empirical research indicates that the market supply curve of labor hours by prime-age males is: Answer Question 2 The higher the compensated elasticity of supply of savings, Answer Question 3 If the return to savings, r, is subject to taxation at rate t, then in equilibrium a saver’s marginal rate of time preference will equal: Answer Question 4 The Haig-Simons definition of income: Answer Question 5 Comprehensive income: Answer Question 6 Which of the following is the result of The Economic Growth and Tax Relief Reconciliation Act enacted in 2001? Answer Question 7 The reduction in marginal tax rates will: Answer Question 8 Which of the following is true for the federal income tax in the United States? Answer Question 9 The excess burden of tax preferences: Answer Question 10 Tax expenditures are: Answer Question 11 Accelerated depreciation allows corporations to: Answer Question 12 In the long run a corporate income tax that initially reduces the return to investment in the corpo¬rate sector will also: Answer Question 13 If corporations maximize profits, the short-run incidence of a tax on its profits will be borne by: Answer Question 14 If an all-equity firm has after-tax income of $100,000 based on a 34% income tax, what is the after-tax income of an equivalent firm that...
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...within the Middle East. One solution that has been put forth for adoption is the progressive income tax. This paper intends to assess the theoretical bases and popular arguments surrounding this very dynamic topic. The first section provides a brief definition of progressive taxation in contrast with other forms of taxation. It also discusses the most dominant for and against arguments both from a theoretical and an empirical point of view. The second section provides a case study of progressive income taxes in a leading industrial and developed country; the US. The third section provides a comparative study from Brazil; an emerging economy that has recently adopted progressive taxation. Based on the theoretical analysis and the two case studies, the paper concludes by providing policy recommendations that should be implemented in order to complement progressive taxation and gain the best and most balanced results in terms of equality, efficiency and revenues. Finally taxation is only part of the economic equation; proper efficient tax system is only one step forward towards creating equal opportunities through proper government support programs. In order to achieve the best results out of progressive taxation, it has to be combined with extensive targeted government social and welfare programs. Also monitoring is needed for the efficient and purposeful expenditure of government revenue. INTRODUCTION A progressive income tax rate is one in which...
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...Assignment On Impact of Indirect Tax in the Economic Growth of Bangladesh Submitted to Shish Haider Chowdhury Course Instructor Auditing & Taxation Submitted By Sudipta Paul Class ID-1577 21st Batch Date of Submission 07.09.2014 Institute of Business Administration Jahangirnagar University Indirect tax: An indirect tax (such as sales tax, a specific tax, value added tax (VAT), or goods and services tax (GST)) is a tax collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax (such as the consumer). The intermediary later files a tax return and forwards the tax proceeds to government with the return. In this sense, the term indirect tax is contrasted with a direct tax which is collected directly by government from the persons (legal or natural) on which it is imposed. Some commentators have argued that "a direct tax is one that cannot be shifted by the taxpayer to someone else, whereas an indirect tax can be. An indirect tax may increase the price of a good so that consumers are actually paying the tax by paying more for the products.[2] Examples would be fuell, liquor, and cigarette taxes. An excise duty on motor cars is paid in the first instance by the manufacturer of the cars; ultimately the manufacturer transfers the burden of this duty to the buyer of the car in form of a higher price. Thus, an indirect tax is such which can be shifted or passed...
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...Marketplace Marketing Plan Marketing 5332: Executive Decisions in Marketing Company Name: CompuStar Game 3, Team 1 Spring 2008 Executive Personnel: Jason Juren VP Finance Tameisha Smith VP Advertising Reagan Simpson VP Sales Management Monica Greak VP Brand Design Marketplace Marketing Plan Marketing 5332: Executive Decisions in Marketing I. Executive Summary - CompuStar started the first year very optimistic that it could design a strong brand and create a powerful advertising campaign that would lead us to dominance in the market. Our optimism regarding our brand design was well placed, and as of Q5 we have maintained the strongest workhorse brand with a score of 72. We expect this score to improve even further in Q6 given the new R&D items we have purchased (New Word Program & High Speed modem). While the CostCutter brand has been a bit more volatile (We no longer had the best brand as of Q5 68 versus MicroChip's 72) we believe that our coming changes to the brand will give us the strength we need to recapture the market and re-establish ourselves as the premier CostCutters. In year two we plan to continually redesign our brands as we learn from our competitors and as we gather more market data. We have also planned the launch of an Innovator brand and a Traveler brand. These brands are simply copies of the best brands on the market. We feel that by...
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...1.0 INTRODUCTION 1.1 Beam Deflections 1.2 Theory - Calculations DeflectionF formula for the load given above: A determination of flexural stress yields: When rectangular it is Where; δ = Deflection (mm) E = Coefficient of Elasticity L = Span (mm) I = Inertia Factor Mb = Moment of flexure (Nmm) F1 = Load occasioned by weight Wb = Resistance to flexure (mm3) of Load Device (N) σb = Flexural Stress (N/mm2) F = Load of occasioned by additional weight (N) 1.3 Objectives * To investigate the relationship between load, span, width, height and deflection of a beam placed on two bearers and affected by a concentrated load at the center. * To ascertain the coefficient of elasticity for steel brass and aluminium 2.0 METHODOLOGY 2.1 Procedure - Experiement 1A * Investigate the relationship between load and deflection. 1) Set the bearers so that a span of 600 mm is obtained. The interval between each groove on the shafts of the apparatus is 100 mm. 2) Place a test specimen with dimensions of 4 x 25 mm, on the bearers and mount the load device in the center of the test specimen. 3) Set the testing device so that the top of the gauge is centered on the upper plane of the load device. Lower the gauge so that its small hand is at about 10 and set the gauge to zero by twisting its outer ring. 4) Load the weights as shown in the table below and read off the deflection...
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