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Name five objectives of raising taxes and explain how they are achieved by the government
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Objectives of raising taxes
Pension of social and merit goods and services by the government such as roads, health, Education etc.
Efficient allocation of resources e.g. tax the rich more and use taxes to alleviate poverty among low income groups.
increasing taxes, and thus reducing disposable income available on individuals.
Protect local industries e.g. raise the customs duty on imports to discourage consumption of import and encourage consumption of local goods and production.
Creation of employment e.g. government could impose more taxes to reduce investment in private sector (“crowding out” effects) and invest more in public sector to create employment opportunities.
