Restructuring the Economic Framework to Combat Black Economy
Added on 2019-11-12
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Running head: TAXATION ASSIGNMENT Taxation AssignmentName of the StudentName of the UniversityAuthor Note
1TAXATION ASSIGNMENT Table of ContentsAnswer A:........................................................................................................................................2Black Economy:...........................................................................................................................2Shared Economy:.........................................................................................................................3Answer B:........................................................................................................................................4Answer C:........................................................................................................................................9References......................................................................................................................................13
2TAXATION ASSIGNMENT Answer A: The term economy means the monetary and financial condition of a geographicallocation, determined in general by the mutual interaction of the demand and supply forcesoperation in the market of the economy. The demand and supply forces are concerned with thegoods and services that are mostly produced in the economy. Generally, the goods and servicesthat are produced in the economy can be accounted for and falls under the tax net and regulatorydomain of the economy (Mankiw, 2014). Black Economy: The goods and services, which come under the purview of the taxation regulation of aneconomy, comprise of what is known as the white economy. However, few goods and servicesproduced, in the economy fall outside the regulatory purview of the country and are notaccounted for. These productive activities do not fall in the taxation net of the economy and theyform the black economy of that country. The black economy is said to prosper at the cost of thegoverning authority of the economy and its size varies from country to country (Kirchgässner,2017). However, not all the activities falling under the domain of black economy may benecessarily illegal though all the illegal productive activities by default fall in this category. Forexample, the cash payment to a construction worker by a legalized company without any accountof the payment, though not illegal, may fall under the purview of black economy. Again, theactivities like smuggling, bribing, tax evading activities being illegal also comprise the blackeconomy of a country (Schneider & Enste, 2013).
3TAXATION ASSIGNMENT Shared Economy: From the beginning of the existence of society, the economic patterns have undergonesufficient dynamics and changes, with various economic frameworks coming into existence overtime. One such economic framework, which has been a subject of substantial speculation amongeconomists and policy makers, in the contemporary period, is that of the framework of sharedeconomy. The shared economy refers to the economic system in which the individuals canborrow or share the assets, which are already owned by some other individuals. The term assethere means goods and services and in this framework, these assets have the provision to beshared by private individuals, in exchange of monetary fees or in free of cost, depending uponthe situation and the nature of asset, which is being shared (Heinrichs, 2013). The objective and the economic intuition behind this economic model is that byfacilitating sharing of the assets, the economy can move towards a higher efficiency level. Theunderutilized asset with someone can be of usage to another individual who is in need of thatasset but is deprived of it and this can be done in lieu of money. The underlying economicobjective behind this shared economy concept is the maximization of the overall welfare of theeconomy as a whole. The shared economic model has been in existence in real global scenariofor quite some time and there are many evidences of its operation. With the advent of newtechnologies and innovations facilitating global communications, this economic framework isprojected to make more significance in the global scenario and it can become a dominanteconomic framework of operation in the near future (Hamari, Sjöklint & Ukkonen, 2016).
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