1. Taxes and government expenditure programs affect a variety of household behav

Question

1. Taxes and government expenditure programs affect a variety of household behaviors. Some economist contend that they affect fertility decisions, marriage decisions, and decisions to investment in education and training. What provisions of the federal tax and expenditure programs might affect these decisions, particularly for low-income households? What are the approximate magnitudes of the incentives created by the combination of the federal and state income taxes, contributions to social security, and the income phase-outs of benefits from the major social insurance programs?

Explanation / Answer

If the taxes are high, the real income of people would decrease which would make it harder for them to take responsibility of kids, hence they will wait for right time until which they will be able to take the responsibility, same applies to a bachelor as they take decisions for marriage and investment in education and training.

Many incentives have been taken such as transfer payments, subsidies, scholarships ,pensions just to ease the difficulty of society and it's people.

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