Question

6. What are the effects of the financing of government spending through debt or taxes on the wealthy vs. the poor? What is the impact of deficit spending on the distribution of income?

Answer 1

A wealthy man generally pays higher than a poor people. It is because so that balance can be maintained between the country"s people on the basis of their earnings. A wealthy man pays income taxes and additional taxes like surcharge on his tax amount while a poor man is exempt from paying taxes as his income is less than the taxable income.

such taxes are the income source of government to spend on social welfare of the economy. in case if such amount is deficit , then government ca"t spend on social welfare activities like water, electricity, healthy sanitation facility etc.