What are export taxes

what are export taxes

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Import Taxes

Taxes on imports vary by country and change depending on the good that is being sold. These taxes are affected by the political system, in that certain industries and lobbying groups will attempt to encourage the government to raise tariffs to limit their competition. Certain countries may be granted lower tariffs or even no tariffs at all through a trade agreement. Other countries may have their tariffs increased.

Export Taxes

Import taxes are much more rare than export taxes. There is little reason economically to tax the goods flowing out of the country and that help the growth of domestic industries. The only reason for an export tax, aside from the revenue it might raise, would be if a country wished to preserve a certain resource only for domestic use. Certain countries have experimented with taxes on the export of agricultural products.

Protectionism

Protectionism is an economic scheme where the government intentionally seeks to prevent the entry of foreign goods into their markets in order to protect domestic businesses from competition. This economic strategy has generally fallen out of favor in most of the world, though it still has many passionate proponents. During the early industrial revolution it was a common strategy from nations seeking to grow their own large industries in the face of foreign competition.

Free Trade

Free trade is an economic scheme of little to no taxation on the importation of goods. Proponents argue that through comparative advantage free trade will lead to higher economic growth in every nation that participates. Comparative advantage is where a nation focuses on the economic tasks it is most suited for while leaving other tasks to nations that perform them best. In this co-operative frame work growth is unlimited for all and non-zero sum.

Source: ehow.com

Category: Taxes

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