Friday, May 3, 2019
Commentary on a macro economics topic Essay Example | Topics and Well Written Essays - 750 words
Commentary on a macro economics topic - Essay ExampleThis manifests the administrations efforts towards maintaining economic stability in case of unemployment. However, the article reckons that the federal governances unpredictable extended and emergency unemployment compensation programs accrue benefits only after the state exhausts its benefits in case of a recession (Mulligan 1). This demonst says the federal governments concern on unemployment and depicts the governments efforts towards economic challenges standardised recession. Notably, the federal unemployment insurance and any some other temporary federal programs have expiration attends to discourage nation from leaving their jobs, which would lead to increased unemployment levels. In fact, the article notes that although the Unemployment benefits from any program have great grandeur to the unemployed, they equally depress the labor market by encouraging retrenchments and allowing people to remain unemployed (Mulliga n 1). Nevertheless, where the victims argon yet to get other jobs before the expiry date of such programs, the Congress extends the expiry date as part of the fiscal dip deal (Mulligan 1). Indeed, the Affordable Care Act may exchange the Emergency Unemployment Compensation if it expires on celestial latitude. The new program leave alone be more beneficial since it go forth cover the unemployed and the premium subsidies for health insurance (Mulligan 1). This manifests the long-term concern by the federal government to address unemployment in the country. Moreover, the article presents the fact that the continued presence of the Emergency Unemployment Compensation and the new health care assistance derives an incentive for workers and employers to create and retain jobs (Mulligan 1). This is a long-term strategy to eliminate unemployment in the country. The article advocates for employment since it leads to income that generates additional taxes and withheld benefits for the fed eral government (Mulligan 1). However, high tax rate discourages people from working. (Mulligan 1) The humble line depicts the level of the marginal tax rate if the Emergency Unemployment Compensation program expires on December 2013. The diagram shows that upon the expiry, the tax rates are bound to increase more at the beginning of next year. It also shows that the tax rates are bound to increase at a begin rate if the Emergency Unemployment Compensation program does not expire in December 2013. Ideally, the health assistance will compensate the benefits lost from the expiry of the Emergency Unemployment Compensation program. The fiscal cliff as used in the article refers to a combination of expiring tax cuts and across-the-board government spending cuts effective Dec. 31, 2012 (Investopedia 1). Ideally, the fiscal cliff sought to avoid the adverse effects of expiring tax cuts and reducing the government spending at the identical time. The fiscal cliff has an overall effect of reducing the federal budget deficit (Investopedia 1). On the other hand, the marginal tax rate refers to the rate of tax paid to an additional dollar earned done employment (Reynolds 1). Notably, an increase in income leads to an increase in the marginal tax rate. As such, low-income earners accrue lower marginal tax rate that the higher income earners. Although, marginal tax rate seems like an equitable taxation strategy, many people
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