T7 - government policies to deal with poverty etc*** Flashcards
Methods to reduce incoem inequality and poverty
taxes - pro and re
welfare
min wage
eco growth
gov provision of goods and serivces - free shit
education and training
inc hdi
laboru markt legislation, anti discrim
what are the different tax systems
progressiev
regressive
proprtional
what is the aim of progressiev taxx systems
to help reduce inequality by taking less from low earners and more from high earers
how does progressive taxes increase incentives
low amoutn of tax on them lower incoems
what is teh dinishing marginal utility of money
as income inreases, amrginal utility falls,
what does the laffer curve show
trade off of icnreasing tax rates of the tax revenue
why may cutting taxes icnrease tax revenue
as they are likely to work more rather tahn not if progressiev taxes are too high
what is fiscal drag
as wages icnrease people are pushed to higher tax brackets meaning they are taxed more
how does progressive taxes battle fiscal drag
as lower taxes on the newer lower earning jobs, those coming off benefits et c due to that economic growth are unlikely to have massiev incoem chanegs to push them into tax brackets
marginal tax rate
the tax rate levied on the last pound of incoem recived
how does mtr cause fiscal drag
if unadjusted for inflation
what is the poverty cycle
where popel are born into povery get low education poor job, shits an L, simialr for economy
why does unemployment trap cause disincentives to work
as teh wages and taxes people may face may be worse off and dmaage icnoems more, whilst ebing on benefts woudl make tehm richer in a sense
what is the unemploymet trap
a situation in which there is no icnetive for soemoen who is unemplyed to start working due to the loss of ebenfits and need to pay icnoem tax
consequences of government policies
May not be equitable
Can causes icnentives nto to work and be entreprenurial
Arguments teh wider gaps in equality is needed to icnetivise and push for growth
Can cause fiscal drag, unemplyment traps
