Essay on tax and national development

The government invests a significant proportion of its tax revenue in the implementation of Poverty Alleviation Programmes to improve the conditions of poor people in society. Price Stability and Control of Inflation : One of the main objectives of fiscal policy is to control inflation and stabilize price. Therefore, the government always aims to control the inflation by reducing fiscal deficits, introducing tax savings schemes, productive use of financial resources, etc. Employment Generation: The government is making every possible effort to increase employment in the country through effective fiscal measures.

Investment in infrastructure has resulted in direct and indirect employment. Lower taxes and duties on small-scale industrial SSI units encourage more investment and consequently generate more employment. Various rural employment programmes have been undertaken by the Government of India to solve problems in rural areas. Similarly, self employment scheme is taken to provide employment to technically qualified persons in the urban areas.

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Balanced Regional Development: there are various projects like building up dams on rivers, electricity, schools, roads, industrial projects etc run by the government to mitigate the regional imbalances in the country. This is done with the help of public expenditure. Reducing the Deficit in the Balance of Payment: some time government gives export incentives to the exporters to boost up the export from the country.

In the same way import curbing measures are also adopted to check import. Hence the combine impact of these measures is improvement in the balance of payment of the country. When the government want to increase the income of the country then it increases the direct and indirect taxes rates in the country. There are some other measures like: reduction in tax rate so that more peoples get motivated to deposit actual tax. A improved infrastructure is the key to further speed up the economic growth of the country.

Foreign Exchange Earnings : when the central government of the country gives incentives like, exemption in custom duty, concession in excise duty while producing things in the domestic markets, it motivates the foreign investors to increase the investment in the domestic country. Monetary Policy: An overview. School Board. Current Affairs. Mock Tests. Election Results Fiscal Policy of India: Meaning, Objectives and Impacts on the Economy Fiscal policy deals with the taxation and expenditure decisions of the government.

Dr Margaret Chan, Former Director-General of WHO

Some of the major instruments of fiscal policy are as follows: Budget, Taxation, Public Expenditure, public revenue, Public Debt, and Fiscal Deficit in the economy. Issue 2: The basic idea regarding increased employment is that a casino's operation requires labor, and this labor will come from the local area. This, in turn, will reduce unemployment in the area. The question to ask is not just whether casinos decrease unemployment, but for whom they decrease unemployment. Most casino jobs require some kind of skill, be it accounting, dealing cards, security or other expertise.

If a casino is planning to move to a rural area having a relatively less skilled work force, the casino probably will draw skilled labor from outside of the area. If this labor remains outside of the local area and workers commute to the casinos, then unemployment in the local area will remain unchanged. If some of this skilled labor decides to move near the casino, then the unemployment rate which is the number unemployed divided by the labor force in the local area will fall because the labor force has increased.

It is this decreased unemployment rate that is often used as evidence that casinos have indeed improved local employment. However, it is important to realize that unemployment for the original, relatively less skilled population has remained essentially unchanged—only the higher skilled, new arrivals have found employment with the casino.

It is the employment of these new arrivals that has decreased the unemployment rate. The main lesson regarding casinos and their impact on the local unemployment rate for the original population is that local officials and the citizenry need to know whether the work force for the new casino will come from their area. The promise of increased employment for the original population that is often used as an argument for the construction of casinos may not be realized.

In a relatively urban area, there is probably enough variety in the work force to ensure that skilled labor will be provided locally. In rural areas, however, most of the labor will be from outside of the local area, thus leaving the unemployment rate for the original population unchanged. Issue 1: Most states tax adjusted casino revenue and use the taxes to fund state and local programs. In Missouri, the tax rate is 18 percent, and there is an additional 2 percent tax to aid local city governments. Indiana has a 20 percent tax rate. Illinois and Mississippi have a graduated tax schedule.

Casino proponents and state and local governments promote casino tax revenue as a benefit. This revenue is a benefit for the recipients of taxed casino revenue. However, it is important to realize that this revenue is not "new money" to society. Taxes result in a transfer of income from one group to another group—in this case, casino owners to state and local governments and eventually to program recipients. Zero new money was created as a result of the casino tax.


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Issue 2: State governments use casino tax revenue for various programs, but public education seems to be the favored destination for casino tax revenue in many states. In fact, states often promote how much money from casino revenue is earmarked to public education. This suggests to the public that spending on education has increased since the taxing of casino revenue began.

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Not necessarily. The problem is that all earmarked revenue is interchangeable. The same works for state, local and federal governments regardless of the tax and destination of revenue.

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No increase in education spending has occurred. The swapping of casino revenue has yet to be tested empirically, but the issue has been explored using state lotteries. Numerous studies have found that in those states that earmark lottery funds for education, spending on education has not increased beyond historical trend levels after the introduction of the lottery.

Essentially, contrary to the claim made by lottery officials, state lotteries do not appear to help public education. There is no reason to doubt the same result could occur with casino revenue. The issue of whether casinos help or hurt local retail sales, and thus retail sales tax collections, has received the most attention in the academic literature. Essentially, the degree to which casinos attract visitors from outside the local area relative to local customers determines the casino's impact on local retail sales.

If the bulk of a casino's clientele is local, then one would expect retail sales and thus retail sales tax revenue in the local area to be negatively impacted. This is the substitution effect, i. However, if casinos act as part of a "tourist vacation," where non-local visitors spend several days gambling, touring museums and dining out, then local retail sales would probably increase.

Paying Taxes Essay

Another factor to consider is that many casinos have restaurants, shops and hotel rooms for casino customers. All items purchased in these outlets are taxable under state and local sales tax laws. A possible loss in retail sales in the local community may be partly offset by an increase in retail sales activity in the casinos.


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Rural areas that have one or two casinos are more likely to experience a decrease in local retail sales than urban areas that attract a greater number of tourists. Areas such as St. Louis and Kansas City would probably experience less, if any, of a decrease in retail sales compared to rural casino areas such as Booneville or Caruthersville, Mo. Of course, only empirical testing can provide a definite answer regarding retail sales losses and gains due to casinos. An interesting point is that many rural communities do promote their casinos along with other area attractions to draw out-of-area visitors.

Essay on Taxation

Regardless of the specific issues, casino gambling in the United States is likely here to stay. The only question is to what degree its popularity will increase in the future. The topics presented here should be understood by both citizens and government officials when they debate the issues surrounding casinos and economic development. We will email you when a new Bridges article is published.

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