Microeconomics Tax Benefits

Microeconomics Tax Benefits

  • Submitted By: nmei2
  • Date Submitted: 03/07/2009 5:42 PM
  • Category: Business
  • Words: 528
  • Page: 3
  • Views: 1

The economic issue in this case refers to current and potential taxation benefits for families with income source from single or partnered parents.

(b) Why is it a microeconomics issue?
Microeconomics refers to the study of the decisions of individual people and businesses, and the interactions of those decisions in markets. Microeconomics issues may include the prices and quantities of individual goods and services as well as the effects of government regulation and taxes on the prices and quantities of those individual goods and services (McTaggart et al., 2003, p.10). The issue presented in the article is related to microeconomics as the current tax regulations, ‘Family Tax Benefit (B),’ affect the monetary situations of households where only one income earner is present. The issue is stating that all single earning families are currently receiving tax benefits, regardless of their income and needs. As stated by Andrew McCallum, Australian Council of Social Service, “it’s unfair that rich families get $40-a-week, obligation free”. Therefore, it is evident that the issues put forth in the article are relevant to the decisions of individuals from an economical perspective.

(c) What alternative views have been put forth?
In an attempt to defend the current tax regulations, John Howard argued that “Family Tax Benefit (B) compensates single-income families for having access to only one tax-free threshold” (Horin, 2005, p.3.). With this argument, Howard dismisses the criticisms of the tax benefits unfair nature mentioned throughout the article. It can also be said that resources needed for sufficient means testing may lead to excessive administrative work for the government.

(d) Which views are normative? Explain your answer.
Normative views are those statements about ‘what ought to be’. These statements are based on values and cannot be tested (McTaggart et al., 2003, p.11). A normative view was taken by Kay Patterson, Minister for Family and...

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