Question

Suppose the government wants to increase the ability of families to pay for college education, and the government is considering two policy tools, one is a $500 income tax rebate, and the other one is a $500 tax credit for tuition reimbursement (namely, a $500 tax credit would only be received if the family spent $500 on tuition). Please answer the following questions. Which policy tools is more effective in terms of driving up the demand for college education? In addition, which policy tools is likely to make families better off, as measured by a higher level of utility or happiness? Please explain why.

Answer 1

Tax credit for tuition repayment is more powerful policy for boosting up or driving up interest for college education.because tax credit is permitted just when tuition fees is paid .while annual tax discount isn't more helpful at that point tax credit .Tax credit of $ 500 policy tool is probably going to improve families off as measure by joy and a more elevated level of utility.because by getting $ 500 individuals' pay upgrade by this sum and this will urge them to spending more in education.

*********PLEASE UPVOTE AS SMALL TOKEN OF APPRECIATION***********