Philosophy
Policymakers debate the nature of the tax structure they plan to implement (i.e., how progressive or regressive) and how they might affect individuals and businesses (i.e., tax incidence).
The reason for such foitution (??? substitution?) effect, because anything that does not change relative prices is nondistortionary. One must also consider the income effect, which for tax policy purposes often needs to be assumed to cancel out in the aggregate. The efficiency loss is depicted on the demand curve and supply curve diagrams as the area inside Harberger's Triangle.
National Insurance in the United Kingdom and Social Security in the United States are forms of social welfare funded outside their national income tax systems, paid for through worker contributions, something labeled a stealth tax by critics.
Read more about this topic: Tax Policy
Famous quotes containing the word philosophy:
“When Philosophy with its abstractions paints grey in grey, the freshness and life of youth has gone, the reconciliation is not a reconciliation in the actual, but in the ideal world.”
—Georg Wilhelm Friedrich Hegel (1770–1831)
“The literature of the poor, the feelings of the child, the philosophy of the street, the meaning of household life, are the topics of the time. It is a great stride. It is a sign,—is it not? of new vigor, when the extremities are made active, when currents of warm life run into the hands and the feet.”
—Ralph Waldo Emerson (1803–1882)
“Why does philosophy use concepts and why does faith use symbols if both try to express the same ultimate? The answer, of course, is that the relation to the ultimate is not the same in each case. The philosophical relation is in principle a detached description of the basic structure in which the ultimate manifests itself. The relation of faith is in principle an involved expression of concern about the meaning of the ultimate for the faithful.”
—Paul Tillich (1886–1965)