How To Calculate Government Tax Revenue From Graph

Taxation is by and large the most important source of government revenue in nearly all countries.

How to calculate government tax revenue from graph. Ar from equation 5 12. Mr d tr dq d aq bq 2 dq. Add each tax payment made during the legally defined tax collection period to arrive at total tax revenue. This is calculated before any discounts are applied.

Revenue number of units sold x average price. For instance in 2013 the state of new jersey collected a total of 8 235 billion in sales and use tax revenues which was approximately 30 5 percent of the 27 billion the state government collected from all taxes and fees for the same period. By multiplying the number of customers by the average service price. Tax revenue of gdp international monetary fund government finance statistics yearbook and data files and world bank and oecd gdp estimates.

Price is not fixed for this producer known as monopoly producer. The same is true for the average marginal tax rate social security and medicare tax rates the effective corporate tax rate and the capital gains tax rate. For a product based business the formula is. This is the imposed tax per gallon of gas.

According to the most recent estimates from the international centre for tax and development total tax revenues account for more than 80 of total government revenue in about half of the countries in the world and more than 50 in almost every country. The following series of charts ilustrates these relationships. Now let s take a look at the revenue formula itself in both forms. Where a and b are fixed numbers and p is price while q is quantity demanded.

Finally we could simply calculate how much tax revenue that the government collects by multiplying the quantity produced by the tax rate. Total gross revenue does not include any taxes paid for an item. Thus the tax revenue is. Tr price x quantity sold p q a bq q aq bq 2.

Mr from equation 5 13 and 5 15. The new price p2 times the new quantity q2 is the new revenue that. The first part of the total tax revenue equation is 3 3 2 9. So you have the original price times the original quantity and that equals the non tax or previous tax included revenue.

Calculate the total tax revenue in this economy by finding the area of the rectangle border. Put simply calculating revenue means multiplying the price of each product by the total number of units sold. If a boutique priced a blouse at 50 and it sold seven that puts total gross revenue for that product at 350. Ar tr q pq q p a bq.