| To: Sweet Ol who wrote (191563) | 7/14/2015 5:53:17 PM |
| From: Broken_Clock | Respond to of 191570 |
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and, yes, tax breaks are another form of subsidy
Subsidy
From Wikipedia, the free encyclopedia
A subsidy is a form of financial aid or support extended to an economic sector (or institution, business, or individual) generally with the aim of promoting economic and social policy. [1] Although commonly extended from Government, the term subsidy can relate to any type of support - for example from NGOs or implicit subsidies. Subsidies come in various forms including: direct (cash grants, interest-free loans) and indirect ( tax breaks, insurance, low-interest loans, depreciation write-offs, rent rebates). [2] [3]
Furthermore, they can be broad or narrow, legal or illegal, ethical or unethical. The most common forms of subsidies are those to the producer or the consumer. Producer/Production subsidies ensure producers are better off by either supplying market price support, direct support, or payments to factors of production. [1] [1] Consumer/Consumption subsidies commonly reduce the price of goods and services to the consumer. For example, in the US at one time it was cheaper to buy gasoline than bottled water. [4]
Whether subsidies are positive or negative is typically a normative judgment. As a form of economic intervention, subsidies are inherently contrary to the market's demands. However, they can also be used as tools of political and corporate cronyism.
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