Whether a government should impose higher taxes or not. A high tax structure can make a strong economy, but lower taxes bring a lot of foreign investments. This essay will discuss why a low tax structure could be more beneficial than otherwise.
Heavy taxes are better from a strong economy perspective. When higher tariffs are imposed in the state, the government will incur more taxes from the people, this will bring a lot of money back to the state, and it will be able to invest it for the well-being of the society. For example, Australia is a welfare state and has imposed huge taxes. The income tax is 30%, and the general sales tax is 10%. The government is getting the income tax, and the rest of the money is being circulated either by consuming petrochemical products or by utility bills. In such a case, the state has a lot of money to spend on its people. Therefore, imposing higher levies can support the economy.
In contrast, lower taxes can bring a lot of international investments. When the taxes imposed would be lower, people would be more likely to invest in the country, because the profit margins would be higher. In addition to this, the local population would tend to do in-house manufacturing of products and services. This will bring money to the country, which could be used for the well-being of the state. For instance, in Bangladesh, owing to having lower taxes, a lot of international brands are investing in the country. Therefore, lower tariffs are good in terms of the investment they are bringing to the country.
Is a society better off with higher taxes or not? From a strong economy perspective, the option of having heavy taxes seems the right decision, but it blocks foreign investments. So, lower taxes have more benefits in terms of local manufacturing or international investments.