Government's Role In The Economy: Taxation

Fraser Institute Video Contest 2009

•Why do we have taxes?
•What are the negative effects of low and high tax rates?
•What is the appropriate method for governments to discover the optimal level of taxation?

Conclusion
Taxes are beneficial in funding the provision of public services and correcting market externalities. However, sudden spikes in raising or lowering taxes in an effort to discover the optimal level of taxation create market distortion and reduce utility by forcing the household to make uncertain consumption choices. Tax smoothing eliminates uncertainty for households and financial markets. Ramsey equilibrium allows us to reach the optimal level of taxation without the sudden changes in tax rates and consequent negative effects.


Presented by the International Relations Students Association: External Model UN Delegation at the University of British Columbia in Vancouver, BC.

UBC IRSA

Category:

Education

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• UBC
• University
• of
• British
• Columbia
• Vancouver
• IRSA
• International
• Relations
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• Fraser
• Institute
• Video
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• 2009
• Government
• Policy
• Economy
• Taxation
• Ramsey
• Equilibrium

[talulabelle]

This is really great! I think you show all the views of the issue, well done!!! GO UBC IRSA

[jeetchatterjee]

haha aj i like the darth vader sith lord voice

[jeetchatterjee]

it came out pretty well in the end