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 Greeks, with their truly healthy culture, have once and for all justified philosophy simply by having engaged in it, and having engaged in it more fully than any other people.”
—Friedrich Nietzsche (1844–1900)
“That the world is a divine game and beyond good and evil:Min this the Vedanta philosophy and Heraclitus are my predecessors.”
—Friedrich Nietzsche (1844–1900)
“My philosophy is such that I am not going to vote against the oppressed. I have been oppressed, and so I am always going to have a vote for the oppressed, regardless of whether that oppressed is black or white or yellow or the people of the Middle East, or what. I have that feeling.”
—Septima Clark (1898–1987)