Answer to Question #118997 in Finance for Ahmed Jamal

Question

● Assessment​ :
Tax, control, and protect: which is more important?
Government seeks to regulate finance firms in order to collect tax revenues or to better control businesses and the economy or to protect consumers. Which of these objectives do you think is the most important and most likely to guide government policy decisions? and why

Answer 1

On one hand, regulation protects consumers and ensures that all businesses are treated evenly and contributing their fair share to the society. On the other hand, too much regulation can stifle businesses and prevent them from creating jobs and contributing to the economy. 

 A common argument against over-regulation and excessive taxation on businesses is that they impose a net cost on society in the long run.

Controlling businesses of financing firms by government is most important as in this case government shall be able to achieve its all other objectives as well. Most importantly the consumers shall get benefit of quality and interest rate so charged to them and all financing firms shall focus on making profits due to high competition in market. Hence ultimately, government shall be able to collect higher amount of tax due to high profits earned by financing firms.