85591
Beschreibung
Mindmap von Harley Wickstead, aktualisiert more than 1 year ago
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Erstellt von Harley Wickstead
vor mehr als 11 Jahre
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Principles of Taxation
- graph- effects can be shown
- Assumptions
- Individuals
can vary the
hours they
work
- All earnings
are taxable
- Each hour of work is
equally productive
- One wage rate exists
- Demand for labour
is perfectly elastic
- Tax imposed is
proportional income tax
- Individuals
can vary the
hours they
work
- Income effect
- individuals encouraged to work
harder as they can afford less
- individuals encouraged to work
harder as they can afford less
- Substitution effect
- individuals encouraged not to work extra as
marginal costs outweigh the marginal benefits
- individuals encouraged not to work extra as
marginal costs outweigh the marginal benefits
- Theory leads to a Problem
- difficult to predict tax as the
two effects are opposite
- difficult to predict tax as the
two effects are opposite
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