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Taxes more low. It leads to reduction of rates of updating of the capital, and those
Address to projects where it is easier to cover the current income of taxes, and
Refuse the projects possessing high level of profitableness, but
Smaller possibilities to avoid the taxation. The share increases
The enterprises covering incomes of the tax official, reporting
In false figures of losses. Winning as a result of evasion from taxes,
Investors frequently take benefits from such projects, which in
The validity only reduce riches. The capital is spent for nothing,
And resources distract from those spheres where they could be used with
The greatest effect.
Thirdly, high tax rates stimulate acquisition not those
The goods which are really necessary, and that which purchases allow
To reduce the taxable sum. At high limiting tax rates
The goods allowing the tax discount, will appear rather cheap for
Payers of heavy taxes. Thinking not so much of costs of a society,
How much, certainly, about personal costs, and facing the high
Limiting tax rates, tax bearers will spend more
Money for the luxury goods subtracted from the taxable sum: the upholstered
- offices of office, conference on Hawaii, magnificent cars and it.
- . As similar expenditure reduce the sum of taxes, people will do them
Even then, when estimate their value below costs of their manufacture.
Losses and an inefficiency - by-effects of such system
Thus, high tax rates reduce the productive
Activity, interfering with capital investments and promoting the useless
To waste of resources. It is easy to foretell that the income of the country which enters
High tax rates, will fall much more low potentially possible
As shows tab. 3, some developing countries establish
Extremely high limiting tax rates even on very low
Incomes. For example, in 1989 Tanzania has established the 50 percent tax on
Almost all size of the personal income. Thus, people received in
The order only half of that they earned. In Zambia,
China and Zaire people with the revenues making less of 10 thousand dollars
The USA, faced limiting tax rates from 55 % to 75 %. Most
High limiting tax rates - 60 % and more - have been established in
Iran, Morocco, Dominican republic, Zimbabwe and Cameroon.
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