The Solow Swan Model An Economic Model Of Long Run...

Qualitative Analysis The Solow-Swan model is an economic model of long-run economic growth in neoclassical economics. The model was developed by Robert Solow and Trevor Swan, independent of each other in 1956. This model is sometimes referred to as simply the Solow model, or the Neoclassical Growth model. The model focuses on four variables: output or GDP, capital, labor, and â€Å"knowledge†. The textbook Solow-Swan model is set in continuous time where there is no international or government trade. The Solow-Swan model is originally an extension of the Harrod-Domar model, which is what the two economists Solow and Swan derived their function from. They extended the model by adding labor as a factor of production, and capital-labor ratios are no longer fixed which made the Solow-Swan model stable compared to the unstable Harrod-Domar model. Today the Solow model is used by economists to estimate the separate effects on economic growth of technological change, capital and labor. Additionally, the model has been used to help explain growth differences between countries and help address economic growth issues. Quantitative Analysis There are many assumptions that go into the Solow Model since it is a model in a pure production economy. We assume that all people work all the time, there is no leisure choice.Show MoreRelatedNeoclassical Theory Of Keynesian Theory1578 Words   |  7 Pages(UK) view of Keynesian economics? Intro The Neoclassical-Keynesian synthesis contains theoretical principles and ideas from both the Neoclassical school of economic thought and Keynes’ General Theory. The UK Cambridge Post Keynesian view of economics also contains elements from both these schools, yet the Neoclassical Keynesian synthesis and the UK Cambridge Keynesian bodies of economic thought differ in their views, methods and ideas. 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Australian Taxation Law and GST Reforms †MyAssignmenthelp.com

Question: Discuss about the Australian Taxation Law and GST Reforms. Answer: Introduction In an economy there are number of taxes imposed on industries, organizations, individuals etc. By imposing such taxes the government of particular country generates revenue to undertake various activities of development. Broadly there are two types of taxes namely: Income tax and GST. In Australia currently GST is charged on almost every good and services at a rate of 10%(Mccout 2014) and Income tax in Australia is charged at different rates. In Australia income taxes are as high as 22.78-30.13%, if an individual is earning a sum of $87,001-$18, 0,000. If an individual is earning $18,201-$37,000 then the person is liable to pay taxes of 0-9.5% on his income. Now if we see this difference between the tax charged under GST and the taxes charged under income tax has a huge difference. In this project, we are going to study about the GST Income tax in detail. Critical analysis What do you mean by GST? GST is good and services taxes that are levied on most of the goods and services in Australia at a rate of 10%. GST was implemented in taxation structure of Australia in the year 2000. Now if talk about Income tax, these are the taxes that an individual, firm, organization needs to pay on the income earned by them in a year. If we compare GST and Income tax of Australia then we will see a huge difference in the rate of both of these taxes. Where GST is as high as 10% only, Income tax may reach up to 45% on the earnings of the individuals or firms. Most of the population in Australia is in favor of increasing GST, in order to lower the rates of personal income tax(McKenzie 2009). Increasing GST Now firstly we will discuss if that happens, how it is going to affect the Australian economy in a good way. GST is levied on goods and services, and goods and services are bought by everyone. GST is payable by its end users hence it is really difficult to avoid such taxes(Reuters 2017). In Australia if the rate of GST is increased even by 5-8%, it is going to benefit the government in a very good way. Goods and services are the need of everyone; no one can live without goods and services. Even the poorer of the peoples manages to buy goods or services (food, clothes) etc. So when an individual or anyone in an economy buys goods or services, they become liable to pay GST on the services or the goods acquired(ghose 2017). Now if we talk about Income taxes, Australian government does not charge anything from an individual who is earning $1-$18,200 in a year. Now the people falling under this bracket are not supposed to pay any taxes. However these peoples are liable to pay GST. When an individual works hard for a year and at the time of paying taxes, it really crunches his heart to pay a large chunk of his earning in the taxes, whereas when a person goes to market and buy goods or services, they do not even bother about GST or anything. Hence GST is not a noticeable tax(Arun 2015). Most of the goods and services falling under the area of education, fresh food beverages are exempt from taxes of GST(al 2017). Only 48% of GST is paid currently in Australia, which is considerably low when compared to the income taxes. Decreasing or Maintaining GST We will now talk about the cons of increasing GST and lowering the income taxes. The current population of Australia is 2, 46, 41, 662. Only around 10% of the working population of Australia has paid 50% of the income taxes in the year 2014-15(kelly 2015). The sum paid by this 10% of the population was AD $176 billion. This is way more than any other taxes received by the Australian government. So it is an obvious thing that a government will impose taxes on such areas, where the revenue generated is enough to develop the entire economy. GST is exempted on education, fresh foods and beverages, where as income tax are only exempted on the people earning AD 1$-$18001. So Australian government has a bright scope of earning more revenue from the income tax payers. Conclusion After observing and going through all the facts and information a detailed conclusion is provided here, Australian government should revise its GST tax rates and income tax rates as well. There is a need to increase the GST slightly so that, a little burden of income tax can be reduced from the shoulders of the income tax payers. GST is a tax that is not noticeable, hence it can be increased to a point where it do not effects the pocket of the tax payers but proves out to be the most efficient and effective way of generating revenue for the government(irvin 2016). After considering the income tax rates in Australia, they are way higher than that of GST. In order to achieve best results out of their taxation structure, Australian government can broaden the area of GST by not exempting the taxes on fresh food beverages and education. However they can be charged at a different rate from the rich and the poors. By this the Australian government can ensure equitable growth in all the sec tors of their economy. Bibliography al, CE 2017, 'tax kit', comprises principles of taxation law, vol 1, no. 10, p. 5. Arun, M 2015, 'GST', in Kalyani (ed.), Indian economy, 2nd edn, Kalyani, Delhi. ghose, D 2017, 'Why GST is over hyped', First post, vol 1, p. 2. irvin, J 2016, 'Australian GST reforms', Acuity Mag, vol 6, no. 15, p. 7. kelly, F 2015, The conversation, viewed 27 july 2015, https://theconversation.com/factcheck-is-50-of-all-income-tax-in-australia-paid-by-10-of-the-working-population-45229. Mccout, P 2014, 'CCH', in Australia master guide for GST, 13th edn, wolters kluwer, sydney. McKenzie, A 2009, GST , 9th edn, Wolters business, Sydney. Reuters, T 2017, Fundamental tax legislations, 2nd edn, Jamie Publishers, melbourne.