Abstract

The purpose of this paper is to identify, establish and analyse the relation that exists between inflation and taxes. A comparative analysis between the economies of Australia and India has been conducted in order to study different scenarios that were and are being experienced in these economies. The economy of India is a developing one whereas the Australian economy is considered as a developed economy which gives a lot of prospects for study and research purposes. In order to study the same, consumer price and tax revenue has been considered for the variables of inflation and taxes respectively. For a better and more comprehensive understanding under tax revenue taxes on goods and services and taxes on income, profits and capital gains have been studied. When higher taxes are imposed, the inflation is forced to decrease and the same relation has been extensively studied in the paper.

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