Economic Effects of Taxation | Indian Economic Services | CUET PG Economics Entrance |

Here we are discussing what are the economic effects of taxation? This topic is being asked in CUET PG Economics Entrance also.
Taxation can influence consumer behavior and spending patterns, impacting overall demand for goods and services.High tax rates may discourage investment and hinder economic growth, while well-designed tax policies can incentivize business activities and innovation. The distribution of tax burdens can affect income inequality, with progressive tax systems aiming to address disparities by placing higher rates on higher incomes.
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