Equity Tax and Adam Smith Essay - 2030 Words

Introduction This piece of eassy will contain two sections. In this part of the eassy I will discuss the meaning and importance of equity in taxation since Adam Smith included it as one of the Canons of taxation. Equity is defined as â€Å"redistributive taxation induces allocative distortions by driving a wedge between the price the consumer pays and the price the producer receives† (Begg et al. 2005, p.219). There are two types of equity to be considered: the horizontal equity, and vertical equity. â€Å"The horizontal equity requires that people in similar situations should be treated in the similar way†. (Kate. 2003, p-8). It seems to be a fair version of taxation to the people paying tax on their earnings. On the other hand, â€Å"Vertical†¦show more content†¦Adam Smiths discussion of taxation in the Wealth of Nations became, like the rest of his work, Ð ° classic setting the central focus for economic thought from that point on. And, like the rest of the work, it was Ð ° confused mixture of the banal and the fallacious. Thus, Smith set forth four canons of evident justice and utility in taxation, which were to become famous from then on. In my analysis of Adam Smiths chapter on taxation, I have come to the conclusion that Adam Smith believed that the taxation of the rental value of land was the best and fairest method of taxation. Introduction This section of the eassy will address the Consideration to what extent the current taxation system reflects the concept of equity. Before dealing with the theory of Consideration to what extent the current taxation system reflects the concept of equity, there are two areas which I will discuss, the first of these concerns the definition of taxation and the second covers the purpose of taxation. Taxation is an involuntary fee paid by either individuals or businesses to the government .While the purpose of taxation is the need to pay for national expenditure on, for example defence, government administration and interest on government borrowing and for local expenditure such as for local services, health, education, welfare and interest on loans. The UK Tax system Modern UK tax policy was developed since 18th century, it researched by the hugeShow MoreRelatedThe Canons Of Good Taxation Essay1464 Words   |  6 PagesCanons of good taxation refer to Adam Smith’s study illustrated in the book ‘Wealth of Nations’. The canons consist of equity, certainty, convenience and efficiency are used to determine the effectiveness of a tax system. This report will critically analyse these canons in relation to the recent bright-line test announced by the government. The bright-line test seeks to improve upon the intention test under ss CB 6-CB 15 by proposing income tax on gains received from disposal of residential propertyRead MoreTax Assessment And Its Effects On Today s Taxation Policy Essay1663 Words   |  7 Pages Tax assessment has always been a hotly debated issue in economic. We all know that it costs a lot to run a household. In the same sense, it costs a lot of money for a government to run a country. This is why t axation is necessary. Through taxation, a government can compensate their spending and fund the social services that benefit most of the society. High tax can compensate the government spending while may curb investment. A question always being raised is that how to impose an appropriateRead MoreClassical and Neoclassical Economists: Adam Smith and John Maynard Keynes1289 Words   |  6 Pageseconomics. For this essay I will only refer to the classical economists and the neoclassical economists. The two most influential economists that helped to shape our economy with their thoughts and theories that are still used in modern economy are Adam Smith a classical economist and John Maynard Keynes a neoclassical economist. These two economists are the most famous economists of all times. Even though that its known that their thoughts are opposites to one and other they also share some similaritiesRead MoreTaxation And Its Effect On Economic Activities1687 Words   |  7 PagesTaxation  plays  an  essential  role  in  our  daily  life.  The tax is compulsory levy from the government used to provide service and benefits to society which nothing will be return received directly.This  essay  attempts  to  explain  how  to  create  a  good  tax  system  or  the  characteristics  of  a  good  tax  system,  and  the  challenges  the  policy  maker  might  face.  The  study  of  the  tax  policy  is  concerned  with  the  design  of  a  tax  system  that  is  capable  of  financing  the  necessary  level  of  public  spending  in  the  most  efficient  and  equitable  way  possibleRead MoreAllied Products Assignment822 Words   |  4 Pagesbeginning this year and Allied Products expects it to stay on the market for a total of five years. 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The two most important tax policies are theRead MoreInformation on Laissez-faire and Court Injuction603 Words   |  2 Pagesof commerce.† â€Å"Leave it alone† The concept came from the economic theories of Adam Smith, the 18th-century Scot whose writings greatly i nfluenced the growth of American capitalism. Smith believed that private interests should have a free rein. As long as markets were free and competitive, he said, the actions of private individuals, motivated by self-interest, would work together for the greater good of society. Smith did favor some forms of government intervention, mainly to establish the groundRead MoreUk Tax Reform3661 Words   |  15 Pagesin this paper that even where every one agrees that the tax system should be simple as dictated by the first maxim of Adam Smith, no country is yet to meet this standard. Questions on policy, complexity, equity, administrative efficiency, cost of compliance all increasing the cry for a tax change. 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Causes And Effect Of Google Penalty - 2135 Words

Causes of your Google penalty In our previous article â€Å"Identifying a Google Penalty†, we gave you the information needed to tell if you’d been hit by a search engine penalty as well as the tools to establish just what type of Google penalty your website had been hit with. Now you’ve established just what Google penalty you’re dealing with, it’s time to move on and find out what exactly caused it. Once you get to the root of what caused it, you’ll then be able to fix it. If you’ve suffered a manual Google penalty then you may well receive a message within your Webmaster tools or better yet, an email direct to your inbox giving you ideas on how you might improve your chances. If your website has a bad link profile then you might see a warning page within your â€Å"manual actions† page on the webmaster tools stating that you have unnatural links to your website. 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Productive and Counterproductive Behavior Free Essays

Productive and Counterproductive Behaviors An organization will have employees with one of two behavior types. They can either be productive or counterproductive. The root cause of counterproductive behavior can be rooted in employee turnover, attendance issues, or lack of training. We will write a custom essay sample on Productive and Counterproductive Behavior or any similar topic only for you Order Now It is up to the organization to make an attempt to identify what the causes of their employees’ counterproductive behavior and attempt to find a workable solution. Productive Behavior and its Impact on an Organization Employers want productive behavior out of their employees because productive employees create revenue for the organization. However, employees tend to think just because they are doing â€Å"something† and not idle they are being productive. Their way of thinking would be incorrect. Productive behavior is â€Å"employee behavior that contributes positively to the goals and objectives of the organization† (Jex Britt, 2008). As we can see merely doing something to occupy ones time is not being productive. Whether or not an employee is being productive can be measured by the cost associated with the employee’s performance and how effective they are. For example, there are two employees in a shoe store with similar sales figures and they sell the same number of shoes each month. The only difference in these two employees is that employee A works ten hours per day and employee B works a six-hour day. Employee B is the more productive employee because employee B accomplishes the same goal in fewer hours. There is a lower cost associated with employee B making him the more productive employee. Efficient employees are productive because they complete large amount of work in a short period of time. When employees are being productive they are concentrating on performing â€Å"core tasks† (Jex Britt, 2008) and are bringing in revenue for the organization. An organization with productive employees will see less employee absences and in their turnover rate. Counterproductive Behavior Counterproductive behavior is â€Å"behavior that explicitly runs counter to the goals of an organization† (Jex Britt, 2008). Employees who are counterprodtive may be employees who have issues with absenteeism or frequently tardy, substance abuse, they may steal from the employer, or simply have â€Å"ineffective job performance† (Jex Britt, 2008). Any behavior that prevents an employee from conducting their job and producing for the employer is considered counterproductive. An Employee who take all day to complete a task because they are there all day and getting paid by the hour is an employee that is counterproductive. Another behavior that is counterproductive is an employee that uses unsafe practices at work. By not following safety rules employees can cause an injury to themselves or to another causing the employee to miss work. As previously stated, absenteeism is a counterproductive behavior. Strategies to Increase Productive Behavior To increase productive behavior in an organization and decrease counterproductive behavior an organization must investigate the cause. Sometimes the reason an employee is counterproductive are out of the employees’ control. For situations that are within the employees’ control, the organization must clearly outline their expectations for their employees. An organization must also outline the consequences for such negative behavior. Drug and alcohol testing and an attendance guidelines policy can be established. These policies will let the employee know what is expected of them and the consequences for not complying. The organization should also make efforts to understand why their employees are not coming to work (Associated Content, 2007). There are times when a personal issue can have its affect on an employees’ behavior. An organization can begin an employee assistance program that would offer counseling to employees if such a program were within the organizations budget. Lack of training and the appropriate tools for performing necessary job functions are factors that are out of the employees’ control. The organization needs to ensure all of their employees have all the proper tools. They can easily do a visual survey and question employees asking them what tools they could use to better perform their job function. Organizations must also ensure all of their employees have the proper training. If employees are not adequately trained they do not know how to perform their job functions. Organizations must adequately train or retrain if necessary any and all employees that require training. At times performing follow up training with all employees ensures employees are all on the same page as far as what their specific job functions are. Performance appraisals also need to be performed on all employees in order for them to know how they are performing in according with their job expectations. These performance appraisals will also serve as a tool to help the employee improve their performance and productivity. A performance appraisal should also be used to praise employees and let them know what they are doing that makes a positive impact on the organization (hrVillage, n. d. ). Both of productive and counterproductive behaviors have their impact on an organization. There are a number of reasons an employee can be counterproductive. Once the root cause has been identified an organization can begin to turn the counterproductive behavior into productive behavior. References Associated Content. (2007). Call Centers: 6 Steps to Improving Employee Attendance and Performance. Retrieved, March 29, 2010, from http://www. associatedcontent. com/article/189770/call_centers_6_steps_to_improving_employee. html? cat=31 hrVillage. (n. d. ). Employee Productivity. Retrieved, March 29, 2010, from http://www. hrvillage. com/human-resources/employee-productivity. htm Jex, S. M. Britt, T. W. (2008). Organizational psychology: A scientist-practitioner approach, 2nd ed. New Jersey: John Wiley and sons. How to cite Productive and Counterproductive Behavior, Papers

International Business Theories of Absolute and Comparative Advantage

Question: Discuss about the case study International Business for Theories of Absolute and Comparative Advantage. Answer: Differentiation between theories of absolute advantage and comparative advantage: The difference in productivity of nation is referred as an absolute advantage, while the difference in opportunity cost is known as comparative advantage. It can be also said that with the existence of a comparative advantage both the parties get benefit from trading , as goods will be received by each party at a price less than the opportunity cost of producing that product. On the other hand, the productivity of various producers or economy is compared by Absolute Advantage. In case small quantity input is required by the producer for a good than it is said that the producer is having an absolute advantage regarding theory (Levchenko, and Zhang, 2016). Further, comparative advantage assists the country to specialise in the production of goods for which they have lower opportunity cost which leads to increased production. These two theories are the important concept of international trade which persuades the manner and reason of devoting limited resources to the production of particular products. Applicability of theory of competitive advantage The above phrase describes a circumstance concerning the loss of jobs or fear of loss of jobs, particularly by one nation to a rival. According to the theory of comparative advantage, the decision of export will be dependent on the degree of productivity. Hence the products for which company is more relative productive will be exported and import will be done of those goods in which other nations are relatively more productive (Burchill, Reus-Smit and True, 2013). Since the wage rate is lower in Mexico than the US, Perot had a view that Mexico will be chosen by American companies for construction of plants for their product as the wage rate lower to take advantage of cheaper rate of wages. This move can be taken by the companies who can work with low skill labour of Mexico and not by the other companies. The fear is correct to a certain extent as the Mexican government offers tax benefits and low-cost loan to companies building factories in Mexico and as their wage rate is already lower from other countries. The factors to be considered by Hyundai in selecting Alabama as the site for the factory are price advantage and location advantage. As by constructing automobile assembly unit near Alabama, the company will get the advantage of receiving required in cost effective manner. The price advantage can also be attained as lower wage rate is present there. Since the cost of labour is lower in Alabama it would be beneficial for the company and support in improving the quality of life of people there out will be given by offering them jobs. But due to the increased manufacturing of car increase in the amount of pollution which will harm the environment. Dunnings electric theory advice for foreign direct investment when a foreign country is superior to its own when ownership advantage is available to firm which can be used for making monopolistic profits and when a lower rate of production is available. In the present case as the cheap wage rate is available in the foreign market and therefore it has been chosen for production. Hence, Hyundais decision is consistent with Dunnings electric theory. Differences between a fixed exchange rate system and a flexible exchange rate system The fixed exchange rate is a rate predetermined by the government and not by market forces. In this rate a small change from fixed value is possible. As against it, Flexible Exchange Rate System is a system which determined by demand and supply forces of foreign exchange market. In this system value of the currency is allowed to fluctuate according to change in market forces (Arndt, 2013). The main advantage of Fixed Exchange Rate System is that it prevents speculation in foreign exchange market whereas in Flexible Exchange Rate System, encourages speculation and enable fluctuation in foreign exchange rate. The demerit of flexible exchange rate system, that it generates inflation pressure when the value of imports goes up due to the decline of currency which is not present in fixed exchange rate system. Conditions for devaluation of currency rate The value of a currency is determined by ascertaining how much of other currency can be brought in one unit of home currency. The reduction in value of a currency against another currency is called devaluation. Government intervention in foreign is a reason of official devaluation. The other situations which lead to devaluation of currency are depreciation i.e. when currency rate fluctuates downwards. Devaluation can be said as a decline in country living standard. Recession can also be said as a factor which leads devaluation in currency (Bhalla, 2012). In the above situation, the country needs to motivate business and trade hence, the devaluation of currency is done in order to encourage people to buy goods of their country. In an open market, it is considered that devaluation may lead speculators to sell their currency in an exchange with own country foreign reserves, due to this issuing country has to make actual devaluation. The circumstances under which a country might want to increase its currencys value It can be said that currencies are like commodities which are used either for speculation or for investment purpose. The increase and decrease in value of the currency are because of rising and fall in basic supply and demand. In the case when demand exceeds the supply is a situation when the value of the currency is increased. The increase in interest rate of central bank gives arises to a situation when currency value might be increased by the government (Ashton and Christophers, 2015). Thus, this induces public in acquiring that currency to deposit more money in the bank for earning higher interest rate, with this procedure central bank effectively decreases the supply of money and as far as the demand of currency is high the value will continue increasing. With the increase in employment and per capita income, circumstances arise under which a country might want to increase its currency rate. Determination of prices in foreign exchange market There is no particular formula for determining currency exchange rate but certain parameters and determinants are available which are described here: Beside market forces of demand and supply, the other factors which affect the valuation of rate are speculation, RBI Intervention, Imports and Exports and Interest rates. The exchange rate is determined by the analysing effect of all these factors (Andersen, Diebold and Vega, 2007). The determinants of exchange rate are International parity conditions (relative purchasing power parity), Balance of payment model (focused on tradable goods), Asset market model (focused on assets value). The economic factors including economy policy circulated by government authorities economic conditions which are revealed through economic report are determinants which are to be analysed while determining the exchange rate. Arbitrage activities that affect the foreign exchange market Arbitrage is a methodology in which currency is purchased from one market and immediate resale of currency is being done in another market in order to make a profit from price difference in the two markets. Arbitrage is used for hedging by speculators. The various types of arbitrage methods are purchase parity theorem, two-point arbitrage (geographic arbitrage) which allows a trader to capitalise difference of two currency prices, three-point arbitrage which involves selling and buying of three different currencies. Covered Interest arbitrage allows a trader to capitalise geographical interest rate differentials with risk mitigation (Andersen, Diebold and Vega, 2007). The risk is eliminated by covering exchange rate exposure in the forward market. Facts of question Spot pound and the 90-day forward pound are both selling for $1.65 US interest rate 10 percent British interest rate 6 percent. Impact on Spot price of pound, Interest rate of UK and Interest rate of US is as follows: In the present case Interest rate of US is higher than British interest rate hence, the arbitrageurs will convert pound to dollar and will take advantage of higher interest rate. The increasing demand of dollar will scroll down the price of pound. In the cited situation, due to lower interest rate the pound will be trade at the forward premium against the dollar. This approach will provide recommendation that 90-day rate of forward contract will be increased. Conclusion of entire situation will be that interest in UK will be increased and simultaneously interest rate of US will be reduced. Table 1: Impact on Spot price of pound, Interest rate of UK and Interest rate of US is as follows Factor Impact Spot price of pound Spot price will be down Interest rate of UK Increased Interest rate of US Decreased References Andersen, T.G., Diebold, F.X. and Vega, C., 2007. Real-time price discovery in global stock, bond and foreign exchange markets. Journal of international Economics. 73(2). Pp.251-277. Arndt, H.W., 2013. The valuation effect of changes in exchange rates. PSL Quarterly Review. 41(167). Ashton, P. and Christophers, B., 2015. On arbitration, arbitrage and arbitrariness in financial markets and their governance: Unpacking LIBOR and the LIBOR scandal. Economy and Society. 44(2). Pp.188-217. Bhalla, S.S., 2012. Devaluing to Prosperity: Misaligned Currencies and Their Growth Consequence. Peterson Institute. Burchill, S., Reus-Smit, C. and True, J., 2013. Theories of international relations. Palgrave Macmillan. Levchenko, A.A. and Zhang, J., 2016. The evolution of comparative advantage: Measurement and welfare implications. Journal of Monetary Economics. 78. Pp.96-111.