What you should know about subsidies
Religion & Liberty Online

What you should know about subsidies

Note: This is post #13 in a weekly video series on basic microeconomics.

What is a subsidy? A subsidy is really just a negative or reverse tax, explains Alex Tabarrok. Instead of collecting money in the form of a tax, the government gives money to consumer or producers. In this video by Marginal Revolution University, Tabarrok looks at the subsidy wedge and who benefits the most from different subsidies.

(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)

Previous in series: Understanding tax revenue and deadweight loss

Joe Carter

Joe Carter is a senior writer for The Gospel Coalition, author of The Life and Faith Field Guide for Parents, the editor of the NIV Lifehacks Bible, and coauthor of How to Argue Like Jesus: Learning Persuasion from History’s Greatest Communicator. He also serves as an associate pastor at McLean Bible Church in Arlington, Va.