In this video we cover taxes and tax revenue and subsidies on goods. We discuss commodity taxes, including who pays the tax and lost gains from trade, also called
In this video we cover taxes and tax revenue and subsidies on goods. We discuss commodity taxes, including who pays the tax and lost gains from trade, also called deadweight loss. We’ll take a look at the tax wedge and apply what we learn to the example of Social Security taxes.
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Number of employee is more than number of employer. With more income (employer) saving will occur while with same money distributed to many people, money will be almost all spent. Spending is necessary more economic movement. We can also consider that supply of labor is more elastic than demand of labor so eventually it is the emloyer who pays more tax. Am I correct?
Yes, if elasticities are like that. But the supply of labor is not necessarily more elastic than demand for labor. Imagine that technology allowed demanders of labor (employers) to more easily substitute machines for labor. In that case the demand curve would be more elastic. Also imagine there was less welfare assistance for the unemployed and no minimum wage laws either. Supply of labor would be less elastic. Regarding spending, I would also count investment spending as spending. If business owners have more money to invest, they might invest it – spend it on future goods as it were. The problem in a depression is there is neither consumption nor investment spending.
The Affordable Care Act (ObamaCare) includes a wide variety of new commodity taxes on tanning beds, medical devices, drugs, insurance, hospital services, etc. in order to raise the extra trillion dollars in patient care subsidies over the next decade. Who pays the tax, the medical device maker or the patient that pays higher premiums and co-payments for his hip replacement? THANK YOU FOR A GREAT SERIES!!!
Thank you for the most excellent supply of knowldge. I started the course with opportunity cost of rest of my studies, moved drastically on my knowledge curve with a positive trend and just experienced a shock when the screen showed me "coming soon". Currently, I am on X axes and waiting and wishing. Could you please let us know when we will be back on the curve, it is pretty scarce around here.