The impact of an income tax increase on an economy's consumption spending, real output, and unemployment in the short run will -
- consumption will fall,
- real production will fall, and
- unemployment will rise.
What is income tax?
Income tax is a sort of tax imposed by governments on income made by businesses and persons within their jurisdiction. Taxpayers are required by law to file income tax returns each year in order to establish their tax obligations.
Some key features regarding the income tax are-
- Income tax is a sort of tax levied by governments on the earnings of enterprises and persons within their jurisdiction.
- Income tax is utilized to fund government programs, pay government debts, and give commodities to citizens.
- Personal income tax is a form of income tax applied on salaries, wages, and other sorts of income.
- Corporations, partnerships, small enterprises, and self-employed individuals are all subject to business income taxes.
To know more about the income tax, here
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