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:
“Mr. Alcott seems to have sat down for the winter. He has got Plato and other books to read. He is as large-featured and hospitable to traveling thoughts and thinkers as ever; but with the same Connecticut philosophy as ever, mingled with what is better. If he would only stand upright and toe the line!—though he were to put off several degrees of largeness, and put on a considerable degree of littleness. After all, I think we must call him particularly your man.”
—Henry David Thoreau (1817–1862)
“A writer must always try to have a philosophy and he should also have a psychology and a philology and many other things. Without a philosophy and a psychology and all these various other things he is not really worthy of being called a writer. I agree with Kant and Schopenhauer and Plato and Spinoza and that is quite enough to be called a philosophy. But then of course a philosophy is not the same thing as a style.”
—Gertrude Stein (1874–1946)
“The late Président de Montesquieu told me that he knew how to be blind—he had been so for such a long time—but I swear that I do not know how to be deaf: I cannot get used to it, and I am as humiliated and distressed by it today as I was during the first week. No philosophy in the world can palliate deafness.”
—Philip Dormer Stanhope, 4th Earl Chesterfield (1694–1773)