Name and Describe the Four Levels of Discounting

question 3

Essay

Name and describe the four levels of discounting. For each level, give an example of that type of discounting and list one thing that the practitioner could do to help the client address and move past the discounting.

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Definitions:

Income Groups

Categories of individuals or households segmented by income levels, often used for statistical analysis and policy design.

Proportional Tax

At the individual level, a tax whose average tax rate remains constant as the taxpayer’s income increases or decreases. At the national level, a tax for which the average tax rate (= tax revenue/GDP) remains constant as GDP rises or falls.

Benefits-received Principle

The concept that the amount of taxes an individual pays should be directly proportional to the level of benefits or services they receive from the government.

Ability-to-pay Principle

A taxation principle suggesting that taxes should be levied according to an individual's or entity's ability to pay, typically measured by income or wealth.