Taxation and Lottery for Profligate essays

Taxation and Lottery for Profligate essays The mayor of Profligate is correct in thinking that raising the taxes might exacerbate the city's financial problems, not to mention create new problems, as well. For one thing, the mayor cannot know that the city will make the same amount of money based on previous revenues. Secondly, the mayor knows if taxes go up, consumers are likely to spend less. An increase in sales tax could also result in residents moving out of the city, which would be negative for every segment of the community. For instance, a tax increase would not only burden retail owners and purchasers; it could also cause some retail workers their jobs. Any state tax increase will make an impact on the profits of retailers. Some individuals might lose their jobs and, even worse, retailers operating on marginal profits may be forced to close their businesses. If retailers aren't forced to close, they may still have to lay workers off. These unemployed people are generally people who desperately need jobs just to be able to eat. In addition, those who are laid off tend to spend less money because they have less money. This, in essence, only makes the situation worse. Some argue that raising the sales tax widens the gap between the low and high income. (Schmidt 636) Clearly, raising taxes should be The mayor of Profligate also knows that an additional 7% on top of the taxes that the people are already paying may be too much. He also knows that just because the people voted for it, that does not mean that every single person in the community is in favor of a tax increase. Unbearable taxes result in unhappy voters. Generally, city and state officials who raise taxes are not reelected. In addition, states are limited to how much they can tax. Because of this reason, people and businesses have been known move to a state with less a lower tax rate if their current taxes ...