Public Goods & Taxes. Chapter 11. Public vs. Private Goods. Public Goods Goods that are neither excludable nor rival in consumption Private Goods Goods that are both excludable & rival in consumption. Excludable- consumer who can not pay are excluded.
Excludable-consumer who can not pay are excluded
Rival-consumption by one reduces quantity for others
Public Goods examples: clean air, police protection, radio signals, national defense
Private Goods: Food, Coffee, airline tickets, automobiles, etc…
Progressive Income Tax
Example: If you Earn $100,000
($ 7,000 - 0 ) x 10% = $700
(28,400 - 7,000 ) x 15% = 3,210
(68,800 - 28,400 ) x .25 % = 10,100
(100,000 - 68,800 ) x .28% = 8,736
Total: $ 22,746
Actual Tax Rate: 22.7%
The income Gap has widened last
EQUAL % tax cuts
What best stimulates economic growth?