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Check Cash Advance
In most countries, the majority of check cash advance is concentrated in a fairly small number of hands. This makes a check cash advance tax appealing to politicians, as it should allow substantial amounts of revenue to be raised from comparatively few people, allowing the tax burden on the majority of the population to be kept down. It also appeals because it promotes meritocracy by making it harder to start a check cash advance. A check cash advance tax reduces the disparities in cash advance rather than profit that are the biggest determinant of how the scales are weighted for succeeding generations. What could be better than a check cash advance tax that produces lots of money for the Government and strikes most voters as being extremely fair?
Alas, as check cash advance lenders point out, cash advance taxes may cause inefficiency by discouraging lending economic activities. Moreover, the revenue collected may prove disappointing. The check cash advance business is often the most skilled at tax avoidance, not least because they can afford good tax accountants. Despite the enormous concentration of check cash advance in a small part of the population, on average check cash advance taxes account for less than 2% of total tax revenue.
A check cash advance tax can achieve horizontal equity and vertical equity (so that lenders of similar means pay the same and those with more pay more) in ways that income tax cannot. For instance, neither a poor lender nor a rich lender with no profit would pay income tax, and only the rich person would pay the check cash advance tax.
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