autonomous tax vs flat income tax vs progressive income tax

The effective functioning of taxation in the market economy requires the following basic conditions:Īll stages and the whole process of social reproduction, including production, distribution, exchange and consumption, and all economic activities, must be directly or indirectly placed within the market relationship. Taxation, in this context, would guarantee the stabilization functions of the market economy, promote the formation and perfection of allocative market mechanisms, regulate social redistribution, and limit the negative externalities generated by the market. Thus, taxation will undoubtedly become one of the most important macroeconomic tools of the state in a socialist market economy, given its legal basis and regulation functions. The state, however, will continue to play a role in the overall balance of the economy, industrial restructuring, the maintenance of an equitable competitive environment, and the alleviation of unequal social distribution. With the transition from a planned economy to a market one, the former heavy reliance on regulation, through administrative orders and mandatory production plans, will be reduced substantially, as will the role of administrative pricing tools.

No other administrative measures and economic tools can replace taxation.

Taxation is a means by which the state participates in the redistribution of income, raises public revenue, and forms a macroeconomic lever directly controlled by the state to regulate social production at all stages. Under a socialist market economy, economic operations are organized via the market mechanism, and the market plays a basic role in resource distribution. Role of Taxation in a Socialist Market Economy

Autonomous tax vs flat income tax vs progressive income tax