Implicit tax

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Implicit tax

Lower or higher before-tax required returns on assets that are subject to lower or higher tax rates.

Implicit Tax

The cost of an activity that is not collected by the government but may be the result of government policy. For example, if the government is encouraging economic growth and accepting a high inflation rate, one may consider this an implicit tax on personal savings because inflation renders them worth less over time. An implicit tax should not be confused with an indirect tax, which is a different concept altogether. See also: Explict tax.
References in periodicals archive ?
Instead, the country captures dollars through the fixed exchange rate system and the implicit taxes that are charged for transactions in CUC," Gonzalez-Corzo explained.
We are increasingly mired down with even larger government deficits, higher implicit taxes through the loans we are racking up, the nationalization of health-care insurance, not to mention the auto industry, student loans, etc.
As a result of these very high implicit taxes, the "net load" of the policy--i.
True, all businesses operated by expatriates have to pay implicit taxes by getting sponsored by nationals as silent partners, which in effect is a type of socio-economic subsidy.
engineering) the presence of implicit taxes or subsidies and tax
The author eloquently illustrated that in Pakistan agriculture is subjected to direct, indirect, and implicit taxes.
Some of the tax preferences banks lost under tax reform originally had been intended to offset the costs of implicit taxes such as the non-interest-bearing reserve requirements banks are obligated to hold with the Federal Reserve (the Fed) as well as the cost of other regulations (Neubig 1984).
Perhaps these implicit taxes are not distortionary because they are not enforced or because other government regulations prohibit people from changing their behavior in response to them?
Tax reform in 1986 eliminated many of these implicit taxes and decreased the disadvantages for foreign investors.
incorporation of implicit taxes in the application of various legal
Implicit taxes in Social Security--which measure Social Security contributions, net of benefits accrued, as a percentage of earnings--tend to increase over the life cycle.
The rhetoric on agricultural income tax is premised on weak foundation and there is no reality in such statements that hold that agriculture pays no tax or that it is under-taxed despite the existence of considerable tax potential especially after the implementation of the structural adjustment programme raising agricultural commodity prices to world levels and ensuring end of implicit taxes in agriculture.