Since property taxes are still relatively low in most countries, higher property taxes would be a great candidate to increase tax revenues. However, the fact that these taxes are so visible and difficult to avoid contributes to their being among the most unpopular taxes worldwide and therefore politically difficult to implement.
Inheritance tax
In addition, the inheritance tax is efficient from an economic point of view. Because it is levied at the end of a person’s life, it has little influence on his or her saving behavior, also because the time at which this tax must be paid is not predetermined. The exception to this occurs when an individual derives benefit from giving to, for example, children, and takes this into account in his or her decision to save or give during his or her life. However, this tax is also very unpopular politically, especially as it is seen as a double taxation. You can also go for the track my refund option for the tax.
Corporate tax: economically disruptive and sensitive to capital flight
Although a corporate tax may intuitively be seen as fair, the basis for this tax appears to be lacking from an economic point of view, as companies are owned by households. If the profits of companies are distributed, they will be taxed with a capital income tax. In practice, however, it appears that a corporate tax can be economically efficient, it prevents companies from hoarding the profits in the company for financial reasons. Corporate tax can thus be seen as a withholding tax on the distribution of profits by companies. In addition, a corporate tax prevents a major incentive for entrepreneurs to set up a BV or NV just in order to avoid capital income tax.
However, too high a corporate tax is not desirable from an economic point of view: it results in less investment and lower productivity. In addition, certainly in open economies, there is a risk that companies will move away from relatively high corporate taxes. It also appears that a large part of the costs is passed on to the employees.
Corporate tax
Although a certain amount of corporate tax increases welfare from an economic perspective, it does not seem optimal to impose excessive corporate tax. It is therefore understandable that most countries have opted for increasingly lower corporate tax rates in recent decades. It should be noted here that due to all kinds of tax treaties and exceptions, the actual corporate tax paid is often much lower. This is undesirable and should be counteracted by more international cooperation.
Conclusion
A good tax system minimizes unwanted disruptions to household and business behavior and is as simple as possible. The literature shows that taxing labor in particular leads to many unwanted disruptions. Lowering it will lead to a higher employment rate and more economic growth and employment. The literature also shows that a uniform VAT rate without exemption increases prosperity. A uniform rate leads to fewer disruptions and the additional tax revenues can be used to reduce the burden on labor.