Fiscal Drag as an Automatic Stability Tool, in the Case of New Regulation with Price Criteria in Automotive Sectors Special Consumption Tax (SCT)

Authors : Abdurrahman TARAKTAŞ, Canatay HACIKÖYLÜ

Pages : 159-175

Doi:10.30927/ijpf.335594

View : 18 | Download : 10

Publication Date : 2017-12-31

Article Type : Research Paper

Abstract :Fiscal drag is a result of real or nominal expanding economy and progressive taxation. In general, individuals are forced to enter the upper tax bracket depending on their increased income or expenditure. More tax burden can result in less consumption. Fiscal drag, lack of spending or excessive taxation can cause the economy to slow down. Traditional view suggests that fiscal drag may serve as a natural automatic stabilizer to cool the economy. However, this view ignores the supply side and in particular the potential effects of the high tax burden on economy. This study examines the extent to which the expected automatic stabilization function can be performed and the possible side effects on economic balances and income distribution of fiscal drag in our country in the case of new regulation with price criteria in automotive sectors Special Consumption Tax insert ignore into journalissuearticles values(SCT);.
Keywords : Fiscal Drag, Excessive Taxation, Automotive Sectors, Special Consumption Tax