Week4_Replies

Nayha Wrote:Top earners might favor policies to redistribute income because redistribution benefits more the top earners than lower income earners.Redistribution means to distribute wealth from top earners to those who have a lower income (http://opentxtbc.ca). After reading about redistribution, one self-interested reasons for top earners might favor redistribution is that they reap the benefit more than lower income people. Top earners get higher tax breaks, which is a benefit for the wealthy. Another reason is that it is easier for the wealthy to redistribute their wealth, which means they usually get is right back.The supply curve of labor for any specific occupation is likely to upward-sloping even if, for the economy as a whole, people work fewer hours when wage rates increases.This indicates an increase wages. People are going to work no matter if the wage rate increases.Https://opentextbc.ca/principlesofeconomics/chapter/14-5-government-policies-to-reduce-income-inequality/https://www.forbes.com/sites/jeffreydorfman/2017/07/10/tax-cuts-for-the-wealthy-are-not-income-redistribution/#5b96a9a13297Cleora Wrote:Hello Instructor De Point & Classmates,Two self-interested reasons that a top earner might favor policies to redistribute income are:1) Political Considerations: By looking development with the tax rates, top earners look more generous than they want to be and thus improve their image in the world,2) Economic Considerations: By having individuals with more money, they are able to purchase more goods in the marketplace. For individuals that sell those goods, this eventually means that they earn more money overall.Developing economies tend to rely relatively more than advanced economies on the indirect taxation of domestic and imported goods and services. Indirect taxes are said to be regressive because they tax consumption rather than income, and wealthier people save a higher proportion of their income. But in addition, indirect taxation in developing economies may even increase poverty depending on the structure of tax rates and the consumption basket of households at various rungs of the income scale (Higgins and Lustig 2016).Anupward-sloping laborsupplycurverepresents a case in which the substitution effect of higher wages outweighs the income effect. … To maximize profits, the firm will uselaborup to the point at which the value of the marginal product oflaborequals the wage. This means the marginal product will equal the real wage.The reason why the supply curve of labor for any specific occupation is likely to-be- upward-sloping even if, for the economy as a whole, people work fewer hours when wage rates increases:1. Substitution effectof a rise in wagesWith higher wages, workers will give greater value to working than leisure. With work more profitable, there is a higher opportunity cost of not working. The substitution effect causes more hours to be worked as wages rise.2. Income effect of a rise in wagesThis occurs when an increase in wages causes workers to work fewer hours. This is because workers can get a higher income by working fewer hours. Therefore they may work less.Therefore, after wage rise, workers may work less because they can get their target income with fewer hours spent working.