A tax is said to be a financial charge or any levy that is imposed on a tax payer and the tax payer has to pay it.
Step-by-step explanation:
Taxes reduces demand by raising disposable income and also encourages business to invest more. It influences tax incentives by affecting both demand and supply . It also reduces wages and salaries through marginal tax rate. As a result it will encourage people to work more. If the income tax credit increases it will encourage more low - skilled worker in the labor market. As a result there will be increase in employment.
When the marginal tax rate reduces it will insist companies to invest more in the domestic market rather than in the foreign market.Tax breaks also helps in creating new ideas.