Question

A politician says, We could help low-wage workers by offering them tax credits like the earned income tax credit, but it would be cheaper to do it by raising the minimum wage because that would cost the government nothing ." Evaluate this argument .

Answer 1

Answer - As per my opinion , the argument given by the politician is correct. If the worker will be given the income tax credit by the government , it will put an extra burden on the government budget due to the tax credit. The lesser tax will be fulfilled by the government.

Whereas if the minimum wages are increased , the workers will be able to earn more and also they will not face the problem in paying the tax. Hence the politicians view is correct.