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| Topic: |
Business
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| Number of pages / Number of words: |
7 / 1838 |
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In strong economic conditions, tax revenues increase due to the progressive tax system. The more people earn the higher the marginal tax rates. Import spending tends to increase and there are higher levels of domestic savings. Unemployment during these periods is reasonably low which in turn reduces welfare payments and increases taxation revenues...
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Higher demand for labour in this phase may increase wages and salaries, increasing tax revenues further (Parry & Kemp 1997, pp171-172). Wages are fairly sticky so the effects of wages and salaries may take a while to adjust depending on the regulations surrounding them (McTaggart, Findlay & Parkin 1999, p31...
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