One factor which I would consider under this category is the economic growth and development in my town. If my town is underdeveloped, I would impose lower taxes on small businesses in order to encourage their growth and attract investment in this area. In case it is developed, I would impose moderate taxes in order to attract investments, but also ensure the taxes are high enough to support revenue generation for maintenance of the development agenda, according to the needs in my town.
I would also consider the presence of foreign firms, and would lower taxes if foreign participation is very high, in order to encourage local participation in trade. Sales tax is in my opinion the most beneficial, especially to small businesses, in terms of growth and sustainability. This is due to the reason that this tax directly affects profits of these businesses, which determines their long term survival in the market. My assumption in this case would be that most profits are re-invested into the business. If the businesses do not re-invest their profits, then lowering sales tax would not help in their growth and sustainability.
Property I would consider the location of various properties when imposing tax. Areas with higher property values would attract higher taxes than lower income areas. According to Vazquez and Vaillancourt (2008), buildings which are closer to main roads, the central business district and utilities would attract higher taxes and vice verse. I would also impose lower taxes for buildings which uplift the welfare of the community, such as low cost houses. I would assume that there are no external factors which affect the economy.
For instance, I would be ignoring the current mortgage crisis which has a negative effect on properties. As a citizen As a citizen, these taxes would not be very beneficial to me. Income tax would be the most beneficial, since it directly determines my disposable income. VAT tax would also be beneficial, since it would determine the amount I pay for purchasing goods and services. References. Baumol, W. J. , Blinder, A. S. (2001). Microeconomics: Principles and Policy. Washington: Harcourt College Publishers. Vazquez, J. M. , Vaillancourt, F. (2008). Public Policy for Regional Development. London: Routledge.