Ideally everybody
should pay equal taxes... Increase in taxes to restrict either production or
consumption in unlikely to give result unless prices increase above a certain
threshold, as per the price elasticity of demand for which tax should be levied
according to the same, which would help achieve the objective, discourage
encourage demand supply, sometimes which could be inelastic...
However, a single tax
rate would neither promote demote demand supply and would be neutral to value
added to GDP, a single low rate would incentivize value addition and should
move within a band to adjust to demand and supply shocks to the economy...
If somebody is earning
higher he would pay higher tax in the nominal money terms eventhough he is
paying the same rate... Many other countries levy low and single GST...
The rally in the oil
market is the result of supply cuts and not explicitly due to demand...
However, the advent of other energy resources like renewable energy has eroded
the competitiveness of the oil leading to surplus capacity in oil...
Oil is losing its
competitive advantage... However, higher oil prices have been traditionally
associated with booms and inflation... But, this is not the case now...
Prices have increased
due to supply cuts and little for demand... Oil countries are exporting inflation
to the importer countries... Importing countries might object...
It reduces real wages
and demand... also for the former countries... Actually higher oil price are
cutting demand and supply and profits too...
They lose economies of
scale... and market share among each other... Cheap oil would help avert
competition increase demand and share...
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