Question: Describe a government’s role in laissez-faire economics and describe the U.S. government’s role in the economy from the 1930s on. What is the difference between regressive and progressive taxes?

Expert answer

The government's role in laissez-faire economics is to protect property rights and enforce contracts. The government does not intervene in the economy except to protect these basic rights. This hands-off approach allows businesses and individuals to flourish, provided they can find willing buyers for their goods or services.

The U.S. government's role in the economy changed dramatically during the 1930s, when the Great Depression led to widespread unemployment and poverty. In response, President Franklin Roosevelt implemented a series of New Deal programs that increased government involvement in the economy. These programs included Social Security, which provided a safety net for older Americans; the Works Progress Administration, which put people to work on public projects; and the Fair Labor Standards Act, which set minimum wages and maximum hours.

Since the 1930s, the U.S. government has continued to play a major role in the economy. Government programs like Medicare and Medicaid provide healthcare for millions of Americans, while government regulations help protect consumers from unsafe products and environmental pollution. The government also collects taxes, which fund public services like education and infrastructure.

There are two main types of taxes: regressive and progressive. Regressive taxes are levied at a flat rate, regardless of income. This means that they take a larger percentage of income from low-earners than from high-earners. Progressive taxes are levied at a higher rate for higher earners. This means that they take a smaller percentage of income from low-earners than from high-earners. The U.S. government uses a progressive tax system, which is designed to help reduce inequality.