Friday, October 26, 2012

Wheelan's Taxes #2


Give 2 specific examples of how taxes and/or government programs can affect incentives?

One example if there is taxes on illegal products, than there will be an incentive to create/buy from blackmarkets. People do not want to pay those high amounts of taxes, so they'll try and find ways to avoid it. A government program that creates a lower incentive to work according to Wheelan is welfare where people get paid by the government. Getting money without working creates a lack of effort to find a work/job.

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