The taxation of entrepreneurial income in different market formats

• Pages: 173-184

173

Balkan Journal of Interdisciplinary Research

IIPCCL Publishing, Graz-Austria

ISSN 2410-759X

Acces online at www.iipccl.org

Vol. 8 No.2

September, 2022

The taxation of entrepreneurial income in dierent market formats

Dr. Kristaq Gjyli

University of Tirana, Albania

Abstract

Theory of tax burden studies the impact that public spending and taxes through changes

they cause on prices, benets, income distribution, and other variables have on individuals’

behavior. Classics thought that the theory of tax burden is entirely the same as political

economy. The subsequent schools entirely adhered to this denition that the theory of tax

burden is just a branch of applied classical analysis (Brosio).

The analysis of the theory of tax burden can be carried out by referring to: the time period when

the public operator manages tax revenues and nally the methodological instruments used.

In the rst case, the time period is distinguished from short-term analyses, where immediate

changes following taxation are studied, and the analysis of the long-term period that analyzes all

eects produced by taxation.

In the second case, the use of collected revenues diers in total tax burden, which considers the eects

of taxes on public spending, and relative tax burden that analyzes the eects of replacing one tax with

another that produces the same revenues.

Finally, according to the analysis methodologies used, tax burdens are distinguished: in the

context of partial economic equilibrium and tax burdens in general economic equilibrium.

Keywords: The taxation, entrepreneurial income, market formats.

Introduction

On the immediate eects of taxes on the national economy, dierent authors do

not agree. For some (Wagner, Genovesi), taxes, although very burdensome, can be

a stimulus for activity as they push contributors with high productivity to reduce

their income as a result of tax payments. For these researchers, the tax system is an

important stimulus tool for productive activity.1

For others (Barone, Knight, Fasiani), taxes, especially those very burdensome, always

constitute a hindrance to activity by paralleling every contributor’s activity. These

authors, among others, acknowledge that these burdensome taxes stimulate the

export of capital, emigration of individuals, and tax evasion. In fact:

a) As soon as the tax pressure becomes burdensome in one state, thus crossing a

certain threshold, surpassing those of other states, contributors see the export of their

capital abroad as more valuable.;

b) Similarly, if the tax burden becomes unbearable, contributors prefer to emigrate

from their count;

c) Finally, when taxes are high, contributors seek in every way to hide their wealth

to avoid taxes.

But taxes can also function as a stimulus for increasing productivity for those

enterprises that do not utilize all resources, while the burden of the tax weight always

1 Eisenberg, M. A., & Miller, G. P. (2018). The Law of Corporations and Other Business

Organizations. Wolters Kluwer Law & Business.