should the tax laws be reformed to encourage saving ?

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TOPIC Should the Tax Laws be reformed to Encourage Saving ? (AGAINST )

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Should the Tax Laws be reformed to Encourage Saving ?

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Page 1: Should the Tax Laws be reformed to Encourage Saving ?

TOPIC

Should the Tax Laws be reformed to Encourage

Saving ?

(AGAINST)

Page 2: Should the Tax Laws be reformed to Encourage Saving ?

GROUP MEMBERS

1)Tripti Rai “115”2)Rachit Johari “52”3)Ashutosh shrivastav “112”

Page 3: Should the Tax Laws be reformed to Encourage Saving ?

There are other ways to increase savings instead of relaxation in taxes.

LowerBudget Deficit !

Page 4: Should the Tax Laws be reformed to Encourage Saving ?

BUDGET DEFICIT ? ?

The amount by which a government spending exceeds its income over a particular period of time is Budget Deficit.

Page 5: Should the Tax Laws be reformed to Encourage Saving ?

REASON WHY TAX REFORMS SHOULD NOT BE DONE

• If taxes are reduced then governments budget deficit will increase.

• This means revenue collected by the government will be less and expenditure of the Gov. is high then the budget deficit will increase.

Page 6: Should the Tax Laws be reformed to Encourage Saving ?

CONT…

• Larger budget deficit will shift the tax burden to the future generations.

•If there is high budget deficit this means the government is taking loans (Deficit financing).

Page 7: Should the Tax Laws be reformed to Encourage Saving ?

DEFICIT FINANCING

PRINTING OF ADDITIONAL CURRENCY

GOVRNMENT BORROWINGS

Page 8: Should the Tax Laws be reformed to Encourage Saving ?

PRINTING OF ADDITIONAL CURRENCY

•Reduces the buying power.•Causes inflation.

GOVRNMENT BORROWINGS

•Will drive up interest rates.•Credit will be expensive.

Page 9: Should the Tax Laws be reformed to Encourage Saving ?

• Reducing budget deficit will give public the confidence that the Gov. will be borrowing less in the future there by lowering the rate throughout the economy.

• Which implies that taxes impositions will be less on people.

•Which will increase the savings and investments of people.

BENEFITS OF LOWER BUDGET DEFICIT

Page 10: Should the Tax Laws be reformed to Encourage Saving ?

EVIDENCE

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

0

5

10

15

20

25

30

35

40

SAVINGSINFLATIONFISCAL DEFICIT

Page 11: Should the Tax Laws be reformed to Encourage Saving ?

YEAR SAVINGS INFLATION DEFICIT

2006-07 34.6 6.53 3.3

2007-08 36.8 5.51 2.5

2008-09 32 9.7 6

2009-10 33.8 14.97 6.5

2010-11 32.8 9.47 4.8

2011-12 6.49 4.6

DATA

Page 12: Should the Tax Laws be reformed to Encourage Saving ?

IMPLICATIONS

Lower budget deficit helps in: 1) Lowering inflation .

2) Higher savings .

Page 13: Should the Tax Laws be reformed to Encourage Saving ?