Priyanka's Econ Blog

DANGER ZONES August 30, 2010

Filed under: Section 3 — priyanka821 @ 1:14 am

My biggest danger for the final IB exam is poor time management. I tend to spend too much time on one part of the question rather than equally distributing my time. I will have to improve this year. Another problem I have is misreading instructions. Sometimes I don’t follow the directions because I misunderstand the question since I don’t read it carefully. Lastly, sometimes I have ineffective evaluations because I do not know what to write and I write random things. I think I need to plan out my writing and read properly in order to improve my scores.

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The Wealthy and their Taxes August 26, 2010

Filed under: Section 3 — priyanka821 @ 6:22 am

US Treasury Secretary Timothy Geithner says the “misguided” tax cut policies of the Bush regime must end. Geithner says that the policies are to blame for the huge US fiscal deficits thus the tax cuts for the wealthy must end. Geithner emphasizes that tax cuts for those who make $250,000 over a year will only add to the deficit. However, the Republicans blame the Democrats for jeopardizing the economy further if the tax cuts are not extended. The Republicans claim that with the increase in tax will not increase government revenue and if the rich have money in their pockets they will stimulate the economy.

The Laffer Curve

Those who do not want the Bush tax cuts to expire without being renewed, argue that there is a point at which the government can be over taxing thus lowering their revenue. For instance as seen in the figure above, at T1 the tax rate is too high. This tax rate is a disincentive for workers and businesses to work hard or expand because all their extra profits are going to the government. However, at T2, the government is maximizing their revenue because everyone is working as hard as they and there are no disincentives.

 

The Lorenz curve demonstrates the degree of inequality in the distribution of income. If the rich were to have their Bush tax cuts suspended, predictions are that the curve

 

Google & Gay August 23, 2010

Filed under: Section 3 — priyanka821 @ 2:06 pm

In an effort to support and keep employees Google has decided to cover the extra costs gays and lesbians must pay. This is an effort to attain equity– the state of being fair and impartial. Guidelines for taxes are often thought to be unequal as people’s incomes vary significantly. Williams Institute estimates that homosexuals may pay over $1,100 more than married couples as employer-provided health benefits for domestic partners are counted as taxable income, if the partner is not considered a dependent.  Based on the article  Connie found, Google has decided to raise equity for its 21,000 homosexual employees by covering the extra cost they have to pay which their whose straight colleagues do not.  However, Google is not the first company to benefit its employees, yet their decision may encourage other firms who compete for the same employees to do the same. Google’s decision to pay the extra tax may help the macroeconomic goal of equity to be achieved. Though straight and married employees may not benefit from Google’s decision, the point of equity is to treat people differently in order to reach a just outcome.

For more information visit:

Google to Cover Gay Tax Inequality