Taxes

Question: Give two examples of how taxes and/or government programs can effect incentives.

First example: Gasoline tax- This is a disincentive to drive because they will have to pay more for gasoline with taxes. People will drive less.

Second example: Welfare Programs- This can be a disincentive to work because when the government gives benefits to people who are not working, people tell themselves that there is no reason to work since they are getting benfefits. However this also may be a incentive to work because it may allow people to receive a little help to get back to work such as in the case of a single mother with children.