Income 0.0 / 5 ? SociologyPoverty, wealth and welfareASAQA Created by: mischaxCreated on: 22-05-17 18:09 TAX AVOIDANCE (MASKING) 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) 1 of 4 TAX EVASION (THE 'HIDDEN ECONOMY') 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 2 of 4 TYPES OF INCOME 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 3 of 4 MORE TYPES OF INCOME 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 4 of 4
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