The economic goal encroached upon when the government taxes wages to provide unemployment benefits is economic equity. This occurs because the redistribution of income via taxation and benefits affects the fairness or equity in the allocation of economic resources, where some individuals bear the tax burden to support others who are unemployed.
Explanation of Economic Goals in Context
- Economic equity involves fairness in income distribution. When wages are taxed to fund unemployment benefits, it reflects a trade-off where the goal of equity (helping those out of work) may reduce incentives or the disposable income of wage earners.
- Although this policy aims to support social welfare and reduce economic hardship among unemployed individuals, it can interfere with other economic goals such as efficiency or economic freedom.
Thus, the primary economic goal encroached upon is economic equity due to the redistribution through taxation for social support programs. This is a common economic trade-off in welfare policy design.
