Fiscal Policy

Running head : Fiscal Policy

Name

University Course

Tutor

Date

Fiscal Policy

Introduction

Taxes are the main sources of revenue for any government 's development agenda . According to Baumol and Blinder (2001 , they are used to build infrastructure , empower citizens , and provide services among other uses It is however important that taxes imposed match the income of citizens in to prevent a situation where citizens are exploited . There are various forms of taxes imposed by governments and these include income taxes , VAT , property taxes , customs taxes among others

. When determining the taxes to impose on citizens , there are various factors which are considered depending on the entity being taxed . These factors are analyzed below , according to various entities

Small businesses , shops and supermarkets

One factor which I would consider under this category is the economic growth and development in my town . If my town is underdeveloped , I would impose lower taxes on small businesses in to encourage their growth and attract investment in this area . In case it is developed , I would impose moderate taxes in to attract investments , but also ensure the taxes are high enough to support revenue generation for maintenance of the development agenda , according to the needs in my town . I would also consider the presence of foreign firms , and would lower taxes if foreign participation is very high , in to encourage local participation in trade

Sales tax is in my opinion the most beneficial , especially to small businesses , in terms of growth...