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:
“Ordinary people seem not to realize that those who really apply themselves in the right way to philosophy are directly and of their own accord preparing themselves for dying and death.”
—Socrates (469–399 B.C.)
“Why it was that upon this beautiful feminine tissue, sensitive as gossamer, and practically blank as snow as yet, there should have been traced such a coarse pattern as it was doomed to receive; why so often the coarse appropriates the finer thus, the wrong man the woman, the wrong women the man, many years of analytical philosophy have failed to explain to our sense of order.”
—Thomas Hardy (1840–1928)
“How does Nature deify us with a few and cheap elements! Give me health and a day, and I will make the pomp of emperors ridiculous. The dawn is my Assyria; the sun-set and moon-rise my Paphos, and unimaginable realms of faerie; broad noon shall be my England of the senses and the understanding; the night shall be my Germany of mystic philosophy and dreams.”
—Ralph Waldo Emerson (1803–1882)