ECF1100 Lecture Notes - Tax Incidence, Economic Surplus
Document Summary
Week 4: government policies, market efficiency and costs of taxation and subsidies. Taxes are compulsory payments made by a government organisation, whether local, regional, or federal, to people or businesses. Tax revenues are used to fund a variety of government initiatives, such as social security and medicare as well as public infrastructure and services like roads and schools. Taxes are borne by whoever bears the cost of the tax in economics, whether this is the entity being taxed, such as a business, or the final users of the items produced by the firm. Taxes should be taken into consideration from an accounting standpoint, including payroll taxes, federal and state income taxes, and sales taxes. A government often taxes its individual and corporate inhabitants to help pay for public works and services as well as to construct and maintain the infrastructure utilised in a nation.
