Income

Some groups can hide their real income from tax 

The wealthy may employ accountants to find (legal) ways of mimimising their income

= tax avoidance (legal)

WORSE THAN TAX AVOIDANCE 

Pissarides and Weber ( 1989) compared spending patterns with declared income 

'most self employed people who declared avrage earnings pf £3500 had similar spending patternrs to employees who earned £50,000

Suggests self employed don't declare all their imcome to tax authorities

DISPOSABLE INCOME= The money that a person has left after paying tax 

DISCRETIONARY= Amount avaliable to spend  once essential items, ( food, clothing, shelter) are paid for

EARNED (OR ACTIVE)=  money received for doing something (e.g paid employment) 

                                      Actively going out and doing the job 

UNEARNED (OR PASSIVE) : From investments (such as shares, rents, benefits etc) 

                                           Not doing anything to earn the money