# Tax Macroeconomics Definition

 5. A tax levied on producers for every unit produced. Contrary to conventional wisdom,Supply-side economics is a macroeconomic theory arguing that economic growth can be most effectively created by lowering taxes and decreasing regulation, by which it is directly opposed to demand-side economics. Why? Direct taxes come from wages, whilst indirect taxes come from the products those wages would have been spent on. According to supply-side economics, consumers will then benefit from a greater supply of goods and services at lower prices and employment will increase. A per unit tax will likely cause a firm to reduce its This is a collection of the discussion lists from Macroeconomics. 1 Taxes on consumption, asset income and labor income. economic equity: A distribution of assets, resources, and tax liability among the people in a nation or society that is considered fair and just. When the government prints more money or reduces interest rates, it floods the market with cash, which raises inflation in the long run. Description: Recessionary gap is also termed as contractionary gap. In contrast to a lump sum tax, which is a one time payment from producers to the government. A per unit tax increases firm’s marginal cost and average variable cost (thus, also the average total cost), but does not affect fixed costs. It is important to note that an increase in taxation will not tax. Given the presence of asset income tax, consumption tax and labor income tax present (with tax rates $$\tau_{a},\tau_{c},\tau_{L}$$),. n. A change in the level of taxation on income (income tax) will reduce the amount of disposable income available. a governmental assessment (charge) upon property value, transactions (transfers and sales), licenses granting a right, and/or income. However, if an equal or greater sum were given out in benefits to households, particularly to unemployed, then consumption could even rise. The economy operates below the full employment level in a recessionary gap. These include Federal and state income taxes, county and city taxes on real property, state and/or local sales tax based on a percentage of each retail transaction, duties on imports from foreign countries, business licenses, Federal tax (and some states The Simple Economics of Salience and Taxation Raj Chetty NBER Working Paper No. Because of this, C could fall. Inflation tax is not an actual legal tax paid to a government; instead "inflation tax" refers to the penalty for holding cash at a time of high inflation. …Loss of tax revenue - A fall in income results in a fall both in direct and indirect taxes. Write down the household budget constraint. H0,H2 ABSTRACT This paper derives empirically implementable formulas for the incidence and efficiency costs of taxation that account for tax salience effects as well as other optimization errors. 15246 August 2009 JEL No. As a result, governments must either raise the level of tax on existing wage earners, or reduce government spending (or borrow, which is Inflation tax is not an actual legal tax paid to a government; instead "inflation tax" refers to the penalty for holding cash at a time of high inflation. While some believe that economic equity requires that all citizens pay the same amount, others believe that the amount paid should depend on the amount that each citizen can afford to pay without Definition: This is a situation wherein the real GDP is lower than the potential GDP at the full employment level. As a result, governments must either raise the level of tax on existing wage earners, or reduce government spending (or borrow, which is 5. A tax levied on producers for every unit produced. Contrary to conventional wisdom,Supply-side economics is a macroeconomic theory arguing that economic growth can be most effectively created by lowering taxes and decreasing regulation, by which it is directly opposed to demand-side economics. Why? Direct taxes come from wages, whilst indirect taxes come from the products those wages would have been spent on. According to supply-side economics, consumers will then benefit from a greater supply of goods and services at lower prices and employment will increase. A per unit tax will likely cause a firm to reduce its This is a collection of the discussion lists from Macroeconomics. 1 Taxes on consumption, asset income and labor income. economic equity: A distribution of assets, resources, and tax liability among the people in a nation or society that is considered fair and just. When the government prints more money or reduces interest rates, it floods the market with cash, which raises inflation in the long run. Description: Recessionary gap is also termed as contractionary gap. In contrast to a lump sum tax, which is a one time payment from producers to the government. A per unit tax increases firm’s marginal cost and average variable cost (thus, also the average total cost), but does not affect fixed costs. It is important to note that an increase in taxation will not tax. Given the presence of asset income tax, consumption tax and labor income tax present (with tax rates $$\tau_{a},\tau_{c},\tau_{L}$$),. n. A change in the level of taxation on income (income tax) will reduce the amount of disposable income available. a governmental assessment (charge) upon property value, transactions (transfers and sales), licenses granting a right, and/or income. However, if an equal or greater sum were given out in benefits to households, particularly to unemployed, then consumption could even rise. The economy operates below the full employment level in a recessionary gap. These include Federal and state income taxes, county and city taxes on real property, state and/or local sales tax based on a percentage of each retail transaction, duties on imports from foreign countries, business licenses, Federal tax (and some states The Simple Economics of Salience and Taxation Raj Chetty NBER Working Paper No. Because of this, C could fall. Inflation tax is not an actual legal tax paid to a government; instead "inflation tax" refers to the penalty for holding cash at a time of high inflation. …Loss of tax revenue - A fall in income results in a fall both in direct and indirect taxes. Write down the household budget constraint. H0,H2 ABSTRACT This paper derives empirically implementable formulas for the incidence and efficiency costs of taxation that account for tax salience effects as well as other optimization errors. 15246 August 2009 JEL No. As a result, governments must either raise the level of tax on existing wage earners, or reduce government spending (or borrow, which is Inflation tax is not an actual legal tax paid to a government; instead "inflation tax" refers to the penalty for holding cash at a time of high inflation. While some believe that economic equity requires that all citizens pay the same amount, others believe that the amount paid should depend on the amount that each citizen can afford to pay without Definition: This is a situation wherein the real GDP is lower than the potential GDP at the full employment level. As a result, governments must either raise the level of tax on existing wage earners, or reduce government spending (or borrow, which is