How US Government Uses Taxes & Subsidies to Support Inefficient Markets

How US Government Uses Taxes & Subsidies to Support Inefficient Markets

Introduction

Taxes and subsidies are two of the most common tools used by government to help support the markets and economy as a whole. Government uses these two tools to raise revenue, and it also helps the government to redistribute the income among the citizens and business. Taxes are used as a tool to support microeconomic policies, which can help in reducing the overall production of a particular good. This is caused due to the increase in cost of production of the ...