Answer to Question #224770 in Economics of Enterprise for afsda

Question

Can a dictator collect a tax rate of 100% on productions in the country?If no, why not?

Answer 1

Solution:

Yes, a dictator can collect a tax rate of 100% on productions in the country.

 

A dictator is a ruler with absolute power over a particular country and behaves in an autocratic way. Most of them acquire power through forceful means such as coup de tat. A dictator rules a country with an iron fist and they are not reluctant as democracies to use coercion in tax collection. A dictator is very firm, with a stronger concentration of power in the executive branch to ensure that all rules are followed to the later. All loopholes are closed and it is not easy to evade taxes, including enacting heavy punishment on tax avoidance. Therefore, higher tax collection should be expected in such a regime.