The sooner other countries follow their example and base transport taxation on total costs, the sooner rail freight will be able to compete.
By ridding the nation of Taxation and instituting borrowing to fund public expenditures, the nation will shed all those costs of Taxation in deterrence and government excess for the negligible fee of borrowing in the financial markets and the administration of public debt.
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Playing an anticipated 2% move makes sense in an environment of minimal taxation, minimal transaction costs and massive leverage.
While most of us could agree on the importance of funding some level of government activities, we tend to overspend when we fail to perceive the extensive costs of taxation.
Conservative types should think the former are significant, and liberals should think the latter are, but I doubt few think that opportunity cost of government spending is low and so too are the costs of taxation.
However, the costs of Taxation are immense.
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These costs are separate from investments, taxation, subsidies, loan structure, and other costs that are associated more with pricing and financing than with what the actual costs are to produce that energy.
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So for each dollar of corporate welfare that is cut, we save more than one dollar, either through less inflation, reduced interest expenses, increased future private sector spending (due to lower taxation), reduced government costs, or all of the above.
That is, that the value of the marginal spending is greater than the costs of the marginal taxation.
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The final report has taken three months to complete and Steven Lowthorpe, the company's taxation director, says there will be other costs as well as those for setting the scheme up.
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Higher costs for the revenue raised come from consumption taxation (VAT and sales taxes).
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Of course, it does not imply, when transaction costs are positive, that government actions (such as government operation, regulation or taxation, including subsidies) could not produce a better result than relying on negotiations between individuals in the market.
Taxation Commissioner Algirdas Semeta has claimed that the move would save businesses 700m a year in reduced compliance costs, and has stressed that individual rates of corporation tax would remain a matter of national sovereignty.
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