May 03

The Fiscal Cost of Low-Skill Households to the U.S. Taxpayer
Introduction

Each year, families and individuals pay taxes to the government and receive back a wide variety of services and benefits. A fiscal deficit occurs when the benefits and services received by one group exceed the taxes paid. When such a deficit occurs, other groups must pay for the services and benefits of the group in deficit. Each year, govern­ment is involved in a large-scale transfer of resources between different social groups.

Fiscal distribution analysis measures the distribution of total government benefits and taxes in society. It pro­vides an assessment of the magnitude of government transfers between groups. This paper provides a fiscal distri­bution analysis of households headed by persons without a high school diploma. It measures the total benefits and services received by this group and the total taxes paid. The difference between benefits received and taxes paid rep­resents the total resources transferred by government on behalf of this group from the rest of society.

written by Eee Zee


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