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Imposition of taxes on Cook Books

Imposition of taxes on Cook Books

Cook books have become an integral part of human life as they provide the taste factor in the cooking spree. But it’s even more harmful as it further encourages overeating which can lead to various kinds of severe health issues like obesity, diabetes & heart diseases.

Goods can be defined as all kinds of movable properties even cook books are to be considered in this category only. Therefore, for the purpose of tax imposition, the concerned government can impose sales tax which shall arise at the point of sale of suc cook books.

This sales tax which is levied at the time of sale shall be a part Maximum retail price charged to the end user customers. Therefore, it will also increase the price charged to the consumers.

A Sale shall constitute of all the following conditions which should be cumulatively present in all the transactions.

  1. A bargain or agreement of sale;
  2. The payment or promise of payment of price;
  3. The delivery of goods, and
  4. The transfer of property from the seller to the buyer

Thus, sales tax can be levied on the sale of such cookbooks so that customers become aware of incurring such additional costs.

Therefore, this will be an indirect tax for the end user as it will be a part of the Maximum Retail Price or MRP. This shall be collected from the consumer & the seller shall pay this as the tax on his turnover of selling of books.

This extra charge will also affect the supply of cookbooks as demand will tend to decease due to increase in price. Thus, as per economic laws, as price will increase, demand will fall & supply will get directly affected. Thus, supply will reduce tentatively.

Equilibrium level of price can be defined as the market price at which the supply of a good is totally equal to the quantity demanded of such good. Thus, macroeconomic equilibrium is the price level at which the aggregate demand is equal to the aggregate supply.

After, the imposition of taxes, the price level of the cook books shall increase. When the price level increase, the supply level increases as the demand falls therefore, an imbalance is created between the demand & supply. This leads to fall in demand & increase in the supply level of such goods.

At the end of the transaction of sale of cookbooks, the tax will be paid by the seller only. This tax falls in the category of indirect tax as it will be collected from the consumer & paid to the government by the seller.

To some extent, yes , imposing taxes on the cook books can prove to be a good way to finance the various programs so that heath and awareness about proper maintenance of health can be aroused among the general public at large.

But it will not bring a major sea change as the tax rate will be very nominal in comparison to the actual price of cook books. Therefore, there are many more innovative & better ways of doing this. The writers of such books can make their recipes only health oriented as in usage of more herbs and less of oil and spices. They can educate the people about the important benefits of health food. They can give more importance to healthy eating & diet food rather than tasty and spicy food.

Moreover, the government instead of just imposing taxes can also initiate various health awareness & safety programs for the public to educate them & make them aware about various diseases & ways to combat them.

 

References

http://www.tn.gov/revenue/faqs/salesandusefaq.htm

http://en.wikipedia.org/wiki/Economic_equilibrium

http://www.jstor.org/pss/10.1525/si.1986.9.2.201

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