HW1_Q1& 2 - Account 341 Group Assignment One Taxation...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Account 341 Group Assignment One Taxation Group number: Group member List: CHAN Chung Yee Fannie ac_ccyaj CHAN Ying Tung Kelly ac_cytae 08035257 CHAN Yuen Yan ac_cyyap ac_llyac
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Question One a) GST : From the perspectives of the good and service tax’s full coverage of all consumptions of goods and service, it is often regarded as a regressive tax borne by the final customers. Regressive tax means the higher the taxable income, the lower the tax rate borne. GST is regressive in nature. It is because people of different income level will face the same increase in percentage of price based on the market price of goods and services. For simplification, I assume a $ 800 monthly lunch box plan is the only spending of all citizens, after the imposed of GST 10 %, the price will increase by $ 80. For a cleaner working for salary of $8,000, the GST means 1 % of his earning. For a banker earning $ 80,000, the GST means only 0.01 % to him. However, someone argues that since the GST is a multi-level sales tax, people with higher income level tends to spend more on consumption, everyone will eventually bear the same GST rate. This is a surely a misunderstanding if there is no exemption. Take a 10 % GST as an example, lower income groups tend to spend all of their income on necessities. For a family income of $8,000, this household will entitle to pay $800 on GST. Even they tend to reduce their expenses, they cannot reduce their consumption by a significant amount. However, for higher income group, for example couples earning $ 80,000 a month, they can have more autonomy to make a saving and decide their consumption. If they opt to spend $40,000, the tax
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern