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:
“The philosopher’s conception of things will, above all, be truer than other men’s, and his philosophy will subordinate all the circumstances of life. To live like a philosopher is to live, not foolishly, like other men, but wisely and according to universal laws.”
—Henry David Thoreau (1817–1862)
“The philosophy of hedonism means little to lovers of pleasure. They have no inclination to read philosophy, or to write it.”
—Mason Cooley (b. 1927)
“My position is a naturalistic one; I see philosophy not as an a priori propaedeutic or groundwork for science, but as continuous with science. I see philosophy and science as in the same boat—a boat which, to revert to Neurath’s figure as I so often do, we can rebuild only at sea while staying afloat in it. There is no external vantage point, no first philosophy.”
—Willard Van Orman Quine (b. 1908)