Essays on Effects of Tax Rates on Economies Research Paper

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The paper "Effects of Tax Rates on Economies" is a perfect example of a macro & microeconomics research paper. Taxation and tax rates determine the financial policies of different countries. These countries align their financial goal, strategies and development depending on the taxation policies in the country. The structure and financing realized are crucial in the achievement of economic growth. Contrariwise, tax rate cuts can significantly encourage individuals to save, work and invest. When tax cuts are not however financed by immediate spending cuts, the federal budget deficit will be realized; which might effectively reduce a nation’ s savings.

Surprisingly, for a year now UAE has never incorporated VAT systems, as such, it is considering the integration of such policies. The introduction of such systems would mean that the country would reduce its competitiveness in the business environment; notably attracting foreign investments. This paper will help people understand the impact of taxation on a country’ s financial strategy, exploiting information regarding various tax laws observe in various countries and elaborating the least and most tax-friendly places globally, with special emphasis put on the UAE where there is no taxation.

As such, it draws upon secondary literature from divergent researchers in creating a well-informed approach to understand taxation systems. Taxation 1.0 Introduction Taxation is a critical issue that affects the financial strategies and policies of a given country. Taxation plays an important role in determining strategies employed in investment. People like investing where as little as possible will be deducted from their turnover. Therefore, taxation is among the key factors that determine investment plans. Investors are keen to evaluate the amount of taxes they will be required to pay before opening up businesses in different areas.

Generally, global investors pay taxes for foreign investments, capital gains, dividends and interests. Payment of investment-related taxes depends on factors such as the investment income, tax sheltering plans, the corresponding tax laws and the type of investment. Interest earned during investment is subject to taxation at full rates of income, with the rate of taxation being defined by the marginal tax rates. All the other taxable revenues have their corresponding rates and policies.


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