Professional Documents
Culture Documents
GOVERNMENT
REDISTRIBUTES INCOME
TAXES
GOVERNMENT SUBSIDIES
TRANSFER PAYMENTS
TAXES
The enforced proportional
contributions from persons and
property imposed by the state
through its law-making body, by
virtue of its sovereignty for the
support of government and all public
needs.
Important tool for redistributing
income.
Tax creates revenue to the
TYPES OF TAXES
PROGRESSIVE TAX
REGRESSIVE TAX
PAYROLL TAX
EXCISE TAX
PROGRESSIVE TAX
40
10
Quantity of
1 2 3 4 5
Supply of Labor
40
Wage firms
pay 30
Wage w/o tax A
Burden by firm
TAX
Burden by worker
WAGE
B
Wage workers
receive20 Demand for Labor
10
Payroll tax is
a regressive L2 L1
tax
EXCISE TAX