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Pure competition Little, if any shitting and through industry forces only
Pure monopoly Shifting, to varying degrees Possible through firm monopoly po er
Long-run................ full shifting, and through industry forces only (Constant cost conditions)
Shifting, to varying degrees Possible through firm monopoly po er
The long run apart from the !C !" point due to the possible presence of monopoly profits. Thus, an imperfectly competitive firm hich is not operating at the profit-ma#imi$ing point ill be in a position to possibly shift a corporation (business) income ta#, if there e#ists a buffer area of unreali$ed profits ithin hich price-output rearrangements cart be made. %igure &-', hich is described later, demonstrates this phenomenon. %irst, ho ever, the critical (uestion must be as)ed* +hy ould a firm choose not to ma#imi$e profits at the !C , !" point- Such considerations as imperfect mar)et and production )no ledge, the fear of antitrust action, the fear of an unfavorable public image, the fear of attracting ne entrants t o the industry, the %ear .f Stimulating union age demands, and public utility regulation may prevent a fine or benchmar)s as* ma#imi$ation of gross receipts (sales)/ achievement of a target rate of return on investment/ maintenance of stable prices on goods produced by the firm/ application of a percentage mar)up price over
0nreali$ed profits as a necessary contrition for shifting a business income ta# by a firm in impeded competition
1#planation* "ectangle P23C, !a#imum profits here !C , !" at output 4 hich is a position of suboptimal profits.
"ectangle P561C, profits at output 47
The e#cess of P23C over P81C - 0nreali$ed Prate. thus allo ing the possibility of shifting the burden of a profits ta# as price is increased to ard P and output is decreased to ard the profit ma#imi$ation output 4
Price elasticity Price elasticity of product demand. .
indirect ta#es such as general retail sales and e#cise ta#es are more closely associated ith further mar)et transactions and are thus more conducive to for ard shifting.ta# . the demand for the good is perfectly (completely) inelastic throughout the entire curve. the S curve represents the supply and curve 6 represents the demand for the good. ?ence.b demand is relatively inelastic throughout the relevant portion. the price of the good is initially increased by the amount of the.ta# -< The most li)ely occurrence of ta# shifting is sho n in %igure &-.b demand is relatively inelastic throughout the relevant portion. and the post ta# (uantity. since there is no (uantity reaction as the price increases from p to p. 9n %igure &-. hile in %igure &-. The most li)ely occurrence of ta# shifting is sho n in %igure &-.. Constant-cost conditions of supply are assumed. the S curve represents the supply and curve 6 represents the demand for the good. demand is relatively elastic throughout the relevant portion of the demand curve.a.c. Tax shifting and type of tax: characteristics as (7) hether it is direct or indirect and (=) broad based or narro based. >enerally spea)ing the more direct the ta#.c. 9n %igure &-. the more difficult shifting becomes. and the post ta# (uantity. Constant-cost conditions of supply are assumed. demand is relatively elastic throughout the relevant portion of the demand curve. +hen the e#cise ta# is imposed.c. 4. 4. . since there is no (uantity reaction as the price increases from p to p. direct ta#es such as the personal income ta# are not especially conducive to the rather mar)et transactions that are necessary for the successful for ard shifting of a ta#.9n %igure &:. 9n %igure &-. Tax shifting and elasticity 9n %igure &:..c. 9n contrast. hile in %igure &-. the price of the good is initially increased by the amount of the. the demand for the good is perfectly (completely) inelastic throughout the entire curve. The initial (uantity. here the demand is perfectly inelastic. +hen the e#cise ta# is imposed.a. here the demand is perfectly inelastic. The initial (uantity. 9n %igure &-.
a political unit may be a local. 9n this conte#t. Don-commercial sale E. the easier it tends to be to shift the ta#. Revenue classification in Bangladesh • • • Items non-tax revenue: 7. %ines.ppositely. "eceipts for services rendered . a ne (or increased) general retail sales ta# in a city may lead to consumption read@ustments. the narro er the geographical limits of a political unit. state. Tax shifting and political jurisdiction:The geographical nature of the political unit hich levies a ta# also helps to determine its shiftablity. 6efence receipts . or even international government. penalties A forfeiture B. leases and recoveries C.. the more narro based the ta#.9n terms of the e#tent of the ta# base. . the more difficult ta# shifting becomes. 2dministrative fees A charge '. >enerally. %or e#ample. interest =. national. the more difficult it is to shift a ta#. the more broad based a ta#. 6ividend and profit. Tolls A levies &. "ent.
8alue 2dded Ta# (82T) =. Stamp duty (Don-Hudicial) . 9ncome ta# '.ta# revenue A receipts • Items of NBR tax: 7. Land revenue B. Customs duty B..NBR tax: 7. %oreign travel ta# • Items of non.F. Capital revenue 77. "ail ay.ther non. . !otor vehicle ta# '. >ift ta# E. post office 7G. Supplementary duty &. Turnover ta# . Darcotics A li(uor duty =. "egulatory duty C.