My Writings. My Thoughts.
Efficiency as a Principle of Taxation
// July 11th, 2009 // No Comments » // Taxation
Former US President Theodore Roosevelt once said, “Practical efficiency is common, and lofty idealism not uncommon; it is the combination which is necessary, and the combination is rare.” In a very close manner, this is still true when economists deal about efficient taxation.
Aside from fairness, efficiency is the other big principle of a good tax system.  In a broader sense, this refers to the ability to spend the least amount of resources to yield the maximum desired output.  Efficiency is measured by taking into consideration the administration cost, cost of compliance, and the concept of excess burden.
Running every government activity – especially one which is nationwide in scale – costs money. Tax collection costs money and other resources to be administered, hence the term “administration cost”. To collect taxes and other types of revenue is costly. The idea is, the government must be able to collect a lot more than what collection costs. No system is a hundred percent efficient, but costs of administration must be minimized and at the same time yield favorable results.
Compliance cost refers to the monetary and non-monetary cost citizens spend in order to follow the tax system. Paying taxes costs citizens both money and time, in order to avoid penalties or more costs because of non-compliance with the system.
The concept of excess burden is best depicted when consumers decide to buy less of the goods with higher tax imposition, just to be able to finance other goods with fewer taxes. When the behavior of citizens is influenced by the different taxes on goods, it means that these people avoid availing excess burden as much as tolerable.
Oftentimes, better efficiency is achieved by sacrificing fairness, and vice versa. A good tax system considers closely the trade-off between the two principles.
Markets: Different Economic Playgrounds
// June 20th, 2009 // No Comments » // World Finance
A good amount of literature explains how success in the corporate ladder may no longer be enough to finance the needs of the “economically average” individuals and families. There is a perceived need to be involved in business. The richest people are engaged in businesses. Good leadership is seen in business as well. Businesses bring about jobs, and in turn incomes, and in turn, may bring about additional businesses. All people are engaged or have been engaged in any economic playground – all people belong to a market or a combination of markets. Markets are where products, services and technology become tradable and actually traded. Whatever the reason may be, here is a differentiation of some of the existing markets – for veteran economic players to confirm, and laymen to learn.
A bond is the term used to refer to a legally documented promise of payment, or a certificate issued by any entity (usually government or financial firm) promising to pay back borrowed money at a fixed rate of interest on a specified date. A bond market caters transactions regarding bonds.
A stock market is a very busy playground, for the characteristics of stocks are affected by almost all aspects imaginable. Stock is the total quantity of shares issued by an entity involved in economic activity; a share is a part of the entity which is valued at a specific amount at a specific time period. Stock market players are usually organizations; each player consists of people analyzing every aspect and therefore contributes influence to the overall decision.
A foreign exchange market is concerned with the trading of, or the buying and selling of various currencies.
Commodity refers to an item, generally an unprocessed material, which may be consumed, bought and sold, which people find useful in daily life. A commodity market deals about transactions of these important and consumable items.
A real property is term to describe immovable asset, or the land owned by an entity, including all the property on the same land, as well as attached right. A real property market usually caters to permanent and temporary housing needs.
The Benefits of Debt Consolidation
// May 25th, 2009 // No Comments » // debt
Almost everyone has heard of debt consolidation, but many people are still confused about just how it works. It’s actually a simple process in which you obtain a loan for the amount of money you owe and pay off all of your existing debts. Then, instead of multiple monthly payments, you only have one convenient payment.
While it might seem futile to borrow even more money to pay off money that you already owe, debt consolidation has a lot of great benefits. It can keep collection agencies and creditors from harassing you and relieve the stress of constantly worrying about how you’re going to make it from one payday until the next.
You can borrow money with a lower interest rate than you currently have, which in itself can save you thousands of dollars over the course of a few years. And, when you combine all of your debts into one, the payment can be as much as hundreds of dollars lower each month than you’re currently paying.
Short of filing bankruptcy, debt consolidation is the best way to get back on your feet and out of debt. It can allow you to be able to keep more of your money in your pocket each payday. And, can even help you to protect your credit rating.
Finances without Any Hurdles
// April 18th, 2009 // No Comments » // Credit History
Because of today’s financial crisis people are having a hard time paying their loans. In UK, an adverse credit loans is being offered to those who want to regain their financial stability. These loans are referred to as second chances wherein a person has a chance to pay all of his debt. However, a person must be sure enough that what he will be borrowing on adverse loan will paid accordingly as to what the lender and borrower will agreed upon.
Adverse credit loans can be classified either as a secured loan and unsecured loan. Secured adverse credit loans require the borrower to pledge any valuable asset as collateral. The interest rate for this loan is comparatively low and a person can obtain bigger amount of loans from £5000 to £75000 with repayment period of 5-25 years. Unsecured loans can be acquired without the need of collateral. The amount of loans that a person can avail in unsecured loan ranges from £1000-£25000 much lower as compared to secured loan. The repayment term is also shorter and lasts only from 6 months – 10 years. The unsecured loan also requires the borrower to pay much higher interest because of its nature being unsecured. This type of loan is popular among borrower’s line non homeowners and tenants. UK has helped its people live the way they wanted it to be because of these loans. However, people should be very careful in availing this loan for they may end up losing everything because of these loans.
Ways to Start Building Financial Stability
// March 13th, 2009 // No Comments » // World Finance
There are some people who achieve wealth quickly. Others build it over the years. Usually these people started out slow and with enough amount of money it grows from there. Experts believe that proper handling of financials will lead the person to the wealth that he is dreaming of. There are some effective ways to help build the wealth quicker. Most people are eager to become wealthy but they never consider planning for it. People should follow a scheme to ensure that they are on the right path of success. While purchasing it is best to pay in cash rather than using the credit card. Spend only on items that you can afford. Never over spend for it will only ruin the finances. Too many people try to keep up with their neighbours and instead of spending the right amount of money they tend to overspend trying to cope up with their neighbour’s lifestyle. In today’s crisis becoming wealthy is very hard to achieve. A person needs to be resourceful enough to find his way in earning enough for his family.
The financial situation is critical. The plan termed as bail out will cost the taxpayers more than 700 billion. Actually this financial institution does not know how much is at stake if regards with bad loan. The creation of derivative financial products was taken from the mortgages and is highly leveraged. The bail out price tag would run into the trillions of dollars once the true losses are known. The US dollar will nose dive and the only solution for the FED is to print up new money like it has never been before.
How to Get out of Debt, Quickly
// February 25th, 2009 // No Comments » // Credit Cards
Debt is overwhelming and cause sleepless nights and stress within the relationship and can even cause a loss of focus for daily activities. Debt can seem to overwhelm other aspects of the life and leads many consumers to worry about the future of their finances. The thoughts that seem to overcome most consumers pertain to how to get out of debt. Here are some ways that you can use to decrease the term of debt repayment and help you to get out of debt quickly.
Pay more than the minimum payment. Paying only the minimum payment will ensure that the majority of the money is being allocated towards interest costs. Paying double or even triple the minimum payment, as much as you can afford, can decrease the term of the debt up to fifty percent!
Cut Your Costs and Apply this Money to Debt Repayment. Consider making two or three small sacrifices within the lifestyle and use the funds from the savings of these small sacrifices to fund the debt repayment, on top of what is normally being repaid. Remember, the quicker that the debt is repaid, the lower the interest that is going to be charged to the account.
Take Advantage of Debt Consolidation Loans. Debt consolidation loans allow the consumer to have one smaller, lower interest, monthly payments towards one large principal that is used to repay all existing debt. Debt consolidation loans have the ability to preserve the credit rating while ensuring that the debts have been repaid!
