Incentivisation
Incentivisation or incentivization is the practise of building incentives into an arrangement or system in order to motivate the actors within it.
Without incentivisation, systems can be counter-productive.
A simple example of negative incentivisation would be taxing people at 98% on all investment income, which happened in the UK in the 1970s (for the extremely rich).[1] This level of taxation gives individuals an incentive not to invest. This has the effects that:
- People might stop investing
- Taxes might stop being paid (due to people no longer investing)
- The economy might behave poorly (due to lack of investment)
References
- ↑ Paul Graham (May 2004). "Mind the Gap". Retrieved 2011-04-26.
This article is issued from Wikipedia - version of the 9/23/2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.