Taxation
systems are usually modeled in such a way that they take into consideration the
social welfare of the citizens. The government and other policy makers have the
responsibility of ensuring that the system takes into account the needs of the
citizens. The bottom line is that taxation should foster equal distribution of
resources. The rate of taxation is usually arrived at after several
considerations have been made. The rates are not fixed as they depend on the
various economic changes. The issue of how taxation should be distributed among
the different economic classes is yet to be addressed.
Whenever
economic turbulence increases, the policy makers adjust the taxation rates in
an effort to stabilize it.
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