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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.


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Byline: Stefanos Evripidou CYPRUS HAS registered the highest increase in the overall tax burden on citizens and companies from the 27 countries of the EU, while also recording the highest implicit tax rate on capital and the lowest corporate tax.
Browning counts the ways: First, welfare recipients are strongly deterred from working by the high implicit tax rates they face on income they earn.
The authors measured the implicit tax rate associated with an additional year of employment at various ages, marital statuses and life expectancies.
 
 
 
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