ECO 304K Chapter Notes - Chapter 14: Regressive Tax, Public Good, Progressive Tax
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ECO 304K Full Course Notes
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Eco 304k chapter 14 public goods and tax policy. Government provides public goods: public good: nonrival and nonexcludable product. Nonrival: consumption of the good by one person will not diminish its availability to other people. Nonexcludable: difficult to exclude nonpayers from consuming: pure public good: nonrival and nonexcludable, collective good: nonrival but excludable, pure private good: rival and excludable, pure commons good: rival and nonexcludable. Paying for public goods: joint purchase, head taxes. Head tax: collects same amount from every taxpayer. Regressive tax: proportion of income paid in taxes declines as income rises. Side note: progressive tax: proportion of income paid in taxes increases as income rises. Head taxes are not progressive taxes: proportional income tax. All taxpayers pay the same proportion of their income taxes. Private provision of public goods: government can provide goods. Advantages of using the government to provide public goods:
