T3 ECONOMICS CH1 Tax and its Importance — Social Science STD 7 — Question
Tamilnadu BoardEnglish MediumSTD 7Social ScienceT3 ECONOMICS CH1 Tax and its Importance4 Marks
Question
Why need for tax on people welfare? And explain it.
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Answer
The levying of taxes aims to raise revenue to fund governing or to alter prices in order to affect demand.
Some of these include expenditures on economic infrastructure like transportation, sanitation, public safety, education, health-care systems, etc., military, scientific research, culture and the arts, public works, public insurance, etc. and the operation of government itself.
When expenditures exceed tax revenue, a government accumulates debt. A portion of taxes may be used to service past debts.
Governments also use taxes to fund welfare and public services. These services can include education systems, pensions for the elderly, unemployment benefits, and public transportation.
Energy, water and waste management systems are also common public utilities.
The purpose of taxation is to maintain the stability of the currency, express public policy regarding the distribution of wealth, subsidizing certain industries or population groups or isolating the costs of certain benefits, such as highways or social security.
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