November vote says Washington and Colorado is in boon from recreational point of view. They are involved in drugs affair. In Washington most of the revenue comes from license fees and in Colorado from excise taxes. Eventually allowed by federal authorities, initiatives would be taken for tax revenue generation on law enforcement said by Steven Frable, IHS’s U.S regional economist.
The Tax Climate in the country:
A study said now the tax collection is reducing day by day. It’s almost reduced by percentage each year since last eight years. So strict steps should be taken to make it healthy. Government is now seeking to create more business friendly tax climate in which laser focus is not just to collect revenue but to minimise the time and effort needed to comply it.
Low borrowing cost look like adding a value to the growth of the economy which uplifts it and eliminate deflationary phenomenon. But shocking…Its won’t work in that way. The solution to weak economic growth is higher interest rates.
Government’s Raising Interest Rate:
A higher interest rates takes out the purchasing power from the hands of the people as it encourage saving by which they remain with less money. The sequence of this will lead to an deflationary condition.
On the contrary if the borrowing cost that means the rate of interest for loan will increase the situation will be the same. In that case also people have to pay more for their loan and will not be tempted to take further loan. Again purchasing power in the hands of the people will go down.
So it is rightly said by Stephanie Schmitt-Grohe and Martin Uribe in the study published by the National Bureau of Economic Research in Cambridge, Mass. If low interest rates can’t motivate jittery consumers, then the answer may be the opposite: an increase in borrowing costs. Such a shift “can boost inflationary expectations and therefore foster employment,”
As a result In Japan and U.S zero nominal interest is doing nothing to push-up their economic growth.
According to a report higher the current account surplus greater will be the cost of exit as its having a appreciating currency. So Finland is in a good position it has less deficit but whereas Netherland runs a very high surplus.
Inflation or deflation …Both are not good for a healthy economy. So it should be in a balanced way.
A higher borrowing cost encourages employment in the country which leads to higher real wages and higher per capita income. This undoubtedly stimulates an inflationary situation and helps in lifting the economy from slums.