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subsidy
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A subsidy, subvention or government incentive is a type of government expenditure which redistributes from tax payers to individuals, households, or businesses. Subsidies take various forms, such as direct government expenditures, tax incentives, soft loans, price support, and government provision of goods and services. For instance, the government may distribute direct payment subsidies to individuals and households during an economic downturn in order to help its citizens pay their bills and to stimulate economic activity.
A subsidy is money or financial help that the government gives to individuals, households, or businesses, funded by taxpayers. Subsidies matter because they can help people afford necessities during hard times and encourage economic activity, though they involve redistributing tax dollars to support specific groups or industries.
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~31 min read
Article
32 sectionsContents
- Types
- Production/supply subsidy
- Consumption/demand subsidy
- Export subsidy
- Import subsidy
- Employment subsidy
- Tax subsidy
- Transport subsidies
- Energy subsidies
- Fossil fuels
- Housing subsidies
- Categorising subsidies
- Direct and indirect
- Production and consumption
- Broad and narrow
- Monetary and non-monetary
- Economic effects
- Preventing fraud
- Perverse subsidies
- Definitions
- Effects
- Implementation
- Examples
- Agricultural subsidies
- Fisheries
- Manufacturing subsidies
- Others
- Short list of subsidies
- See also
- References
- Further reading
- External links
A subsidy, subvention or government incentive is a type of government expenditure which redistributes from tax payers to individuals, households, or businesses. Subsidies take various forms, such as direct government expenditures, tax incentives, soft loans, price support, and government provision of goods and services. For instance, the government may distribute direct payment subsidies to individuals and households during an economic downturn in order to help its citizens pay their bills and to stimulate economic activity.
Although commonly extended from the government, the term subsidy can relate to any type of support – for example from NGOs, or international organizations. Subsidies come in various forms including: direct (cash grants, interest-free loans) and indirect (tax breaks, insurance, low-interest loans, accelerated depreciation, rent rebates). Furthermore, they can be broad or narrow, legal or illegal, ethical or unethical. The most common forms of subsidies are those to the producer or the consumer.