ECO 1104 Lecture Notes - Lecture 12: Working Poor, Demand Curve, Tax Incidence

• School: University of Ottawa
• Department: Economics
• Course: ECO 1104
• Professor: Lawrence Harris

Document Summary

Affluent, educated, articulate, politically-savvy tenants benefit at the expense of the poor. But landlords and developers have lots of money for political contributions which the law limits. There are lots of ways to make an under-the-table political donation. More illicit behavior encouraged by this bad policy. What"s a better way to help the poor: give them money to buy what they feel will give them a better life. Let them decide: what if you only want to make housing affordable to the poor, give them a tax credit through the income tax system. Give them income supplements through the income tax system. This does not create the distortions of a price floor. The (cid:862)price system(cid:863: with the free market, price rations the product, and everyone willing to pay actually obtains the product. Reduce that quantity bought and sold and cause the buyer to pay more.