Authors libby rittenberg 835
Bạn đang xem bản rút gọn của tài liệu. Xem và tải ngay bản đầy đủ của tài liệu tại đây (382.19 KB, 1 trang )
15.4 Review and Practice
Summary
In this chapter we examined the role of the public sector in the market
economy. Since 1929, both the size and scope of government activities in
the market have expanded considerably in the United States.
People demand government participation in three areas of economic
activity. First, people may want correction of market failure involving
public goods, external costs and benefits, and inefficient allocation created
by imperfect competition. In each case of market failure, the shift from an
inefficient allocation to an efficient one has the potential to eliminate or
reduce deadweight losses. Second, people may seek government
intervention to expand consumption of merit goods and to reduce
consumption of demerit goods. Third, people often want government to
participate in the transfer of income. Programs to transfer income have
grown dramatically in the United States within the past few decades. The
bulk of transfer payment spending is not means-tested.
Government activity is financed primarily by taxes. Two principles of
taxation are the ability-to-pay principle, which holds that tax payments
should rise with income, and the benefits-received principle, which holds
that tax payments should be based on the benefits each taxpayer receives.
Taxes may be regressive, proportional, or progressive. The major types of
taxes in the United States are income taxes, sales and excise taxes, and
property taxes. Economists seek to determine who bears the burden of a
tax by examining its incidence. Taxes may be borne by buyers or sellers,
depending on the relative elasticities of demand and supply.
Attributed to Libby Rittenberg and Timothy Tregarthen
Saylor URL: />
Saylor.org
835
