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ABILITY-TO-PAY PRINCIPLE: A principle of taxation in which taxes are based on the income or resource-ownership ability of people to pay the tax. The income tax collected by our friends at the Internal Revenue Service is one of the most common taxes that seeks to abide by the ability-to-pay principle. In theory, the income tax system is set up such that people with greater incomes pay more taxes. Proportional and progressive taxes follow this ability-to-pay principle, while regressive taxes, such as sales taxes and Social Security taxes, don't.
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Lesson 1: Economic Basics | Unit 5: Policies
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Page: 14 of 18
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Because markets are imperfect, government is prompted to intervene with economic policies.- Economic policies are government actions designed to affect economic activity and pursue one or more economic goals.
Policies can take the form of:- Laws passed by legislatures.
- Administrative actions taken by elected executives.
- Rules set forth by government agencies.
- Decisions made through the courts.
The government has four types of policies.- Fiscal policy: Based on government's power to collect taxes from the public and spend those funds as it chooses. Used for income redistribution and macroeconomic performance.
- Monetary policy: Based on government's centralized control of the money supply. Used for macroeconomic performance.
- Regulatory policy: Based on government's ability to enact laws, rules and restrictions. Used for efficiency and equity
- Judicial policy: Based on government's ability to enforce laws through the courts. Used for efficiency and equity
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TARIFFS Taxes imposed by the government of one nation on imports from other nations. The primary goal of tariffs is to reduce imports and increase domestic production. As taxes, tariffs raise the demand price and lower the supply price, and thus reduce the quantity exchanged. Tariffs are one of three common foreign trade policies designed to discourage imports and/or encourage exports. The other two are import quotas and export subsidies.
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BEIGE MUNDORTLE
[What's This?]
Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club hoping to buy either one of those memory foam pillows or a remote controlled train set. Be on the lookout for telephone calls from long-lost relatives.
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This isn't me! What am I?
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A half gallon milk jug holds about $50 in pennies.
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"What gets measured gets done." -- Peter Drucker, educator
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BACS
Bankers Automated Clearing Services
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