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:
“A cosmic philosophy is not constructed to fit a man; a cosmic philosophy is constructed to fit a cosmos. A man can no more possess a private religion than he can possess a private sun and moon.”
—Gilbert Keith Chesterton (1874–1936)
“It is not easy to make our lives respectable by any course of activity. We must repeatedly withdraw into our shells of thought, like the tortoise, somewhat helplessly; yet there is more than philosophy in that.”
—Henry David Thoreau (1817–1862)
“Even healthy families need outside sources of moral guidance to keep those tensions from imploding—and this means, among other things, a public philosophy of gender equality and concern for child welfare. When instead the larger culture aggrandizes wife beaters, degrades women or nods approvingly at child slappers, the family gets a little more dangerous for everyone, and so, inevitably, does the larger world.”
—Barbara Ehrenreich (20th century)