Arguments against Tax Competition
February 12, 2025
Startup companies typically have a high failure rate. It is said that 90% of all startup companies fail. The percentage of companies failing keeps on reducing as the company grows and obtains more funding. Ideally, when a company becomes a unicorn i.e. achieves a valuation of $1 billion, then there shouldn’t be any chances of […]
In the previous articles, we have already seen that the sponsorship of sports teams can happen at multiple levels. We have also seen how the sponsoring of individual athletes works and how it provides benefits to the sponsor as well as the athlete. It is important to note that sponsorship can happen at levels which […]
The retail industry is unique in many ways. There are several financial and operational concepts which are more relevant to the retail industry than to other industries. Shrinkage is one such concept which has more relevance in accounting for the retail industry. In this article, we will have a closer look at the concept of […]
For any startup financing to be successful, the startup company and the investors need to be on the same page about a lot of issues. This is because, in the absence of this understanding, valuation divergence can be a quagmire of ever-escalating tensions between the two parties. One major source of conflict between these two […]
The financial environment in the retail industry is extremely competitive. This means that retailers are always under pressure from their competitors in order to reduce prices. However, at the same time, retailers also face escalated costs which makes any kind of price reduction very difficult. It is for this reason that over the years, retailers […]
Governments all over the world generally levy graduated taxes on their population. This means that as the income being taxed increases, the tax rate also increases. Under a graduated tax structure, some amount of income is exempted from the tax. Then, there is a different tax slab, which becomes applicable as soon as the income increases. This progressive structure is supposed to help the government earn more money from corporations that earn more.
There are many governments that are now choosing to break away from this pattern. These governments do not levy taxes, where there are multiple tax rates for different incomes. Instead, these governments levy taxes based on a single rate. This is why the system is called a flat tax system. Flat tax systems have become very popular, particularly in countries that were earlier communist.
There are several benefits of having a flat corporate tax system. Some of these benefits have been listed below:
The bottom line is that flat-rate tax systems have empirically shown some advantage over graduated tax systems. However, these advantages are from an economic point of view. The political class stands to lose if flat-rate tax systems are implemented all over the world. This is the reason that they are not very eager to implement the same.
Your email address will not be published. Required fields are marked *