disposable income

Examples of disposable income in the following topics:

• Disposable Income

  • Income left after paying taxes is referred to as disposable income.
  • Disposable income is thus total personal income minus personal current taxes .
  • Discretionary income is disposable income minus all payments that are necessary to meet current bills.
  • Disposable income is often incorrectly used to denote discretionary income.
  • Disposable income can be spent on essential or nonessential items.

• Consumption outcomes

  • Then, disposable income increases to 200 but only consumes 180.
  • Then, disposable income increases to 200 but only consumes 180.
  • Y stands for disposable income.
  • As savings increases as disposable income increases, the saving line slopes upward.
  • As savings (S) increases as disposable income (Yd) increases.

• How Fiscal Policy Can Impact GDP

  • The builders then will have more disposable income, and consumption may rise, so that aggregate demand will also rise.
  • If the builder receives $1 million and pays out $800,000 to sub contractors, he has a net income of $200,000 and a corresponding increase in disposable income (the amount remaining after taxes).
  • This process proceeds down the line through subcontractors and their employees, each experiencing an increase in disposable income to the degree the new work they perform does not displace other work they are already performing.
  • Each participant who experiences an increase in disposable income then spends some portion of it on final (consumer) goods, according to his or her marginal propensity to consume, which causes the cycle to repeat an arbitrary number of times, limited only by the spare capacity available.
  • The builders will have more disposable income, increasing their consumption and the aggregate demand.

• Fiscal Levers: Spending and Taxation

  • The decrease in taxes has a similar effect on income and consumption as an increase in government spending.
  • When the government cuts taxes instead, there is an increase in disposable income.
  • Part of the disposable income will be spent, but part of it will be saved.
  • where MPC is the marginal propensity to consume (the change in consumption divided by the change in disposable income), and MPS is the marginal propensity to save (the change in savings divided by the change in disposable income).
  • The tax multiplier is smaller than the government expenditure multiplier because some of the increase in disposable income that results from lower taxes is not just consumed, but saved.

• The consumption function

  • Such consumption is considered autonomous of income only when expenditure on these consumables does not vary with changes in income.
  • Such consumption is considered induced by income when expenditure on these consumables varies as income changes.
  • C1 is the marginal propensity to consume (MPC) and Yd represents the disposable income.
  • That would mean that people consume 60% of their disposable income and save 40%.
  • Disposable income is calculated by subtracting taxes and transfer payment, but after adding back government subsidies, such as welfare payments.

• Personal Income

  • In the United States the most widely cited personal income statistics are the Bureau of Economic Analysis's (BEA) personal income and the Census Bureau's per capita money income.
  • BEA publishes disposable personal income, which measures the income available to households after paying federal and state and local government income taxes.
  • Personal income and disposable personal income are provided both as aggregate and as per capita statistics.
  • BEA produces monthly estimates of personal income for the nation, quarterly estimates of state personal income, and annual estimates of local-area personal income .
  • The Census Bureau also produces alternative estimates of income and poverty based on broadened definitions of income that include many of these income components that are not included in money income.

• Sale

  • Unlike a regular disposal of an asset, where the asset is abandoned and written off the accounting records, an asset disposal sale involves a receipt of cash or other proceeds.
  • Depreciation expense is reported on the income statement as a reduction to income.
  • Depending on whether a loss or gain on disposal was realized, a loss on disposal is debited or a gain on disposal is credited.
  • The loss or gain is reported on the income statement.
  • The loss reduces income, while the gain increases it.

• Involuntary Conversion

  • Involuntary conversion of assets occurs when disposal is due to unforeseen circumstances, such as theft or casualty.
  • The involuntary conversion of an asset occurs when an asset must be disposed of due to unforeseen circumstances, such as theft, casualty, or condemnation.
  • If the monetary exchange is more than the asset's book value, updated for depreciation up to the disposal date, a gain on disposal results; if the proceeds are less, the disposal realizes a loss.
  • An involuntary conversion involving an exchange for monetary assets is accounted for the same way as a typical sales transaction, with a gain or loss reported in the income statement in the period the conversion took place.
  • An airplane manufacturer's involuntary conversion of a plane can result in a loss or gain on the income statement.

• Reporting Irregular Items

  • Irregular items are reported separately from the income statement proper so that users can better predict future cash flows.
  • Irregular items, which are by definition unlikely to recur, are reported separately from the income statement proper so that users can better predict future cash flows.
  • A discontinued operation is a component of an enterprise that either has been disposed of or is classified as "held for sale," and:
  • is part of a single, co-ordinated plan to dispose of this separate major line of business or geographical area of operations; or
  • Any gain or loss from sale of assets should be recognized in the statement of comprehensive income.

• Introduction to Taxes and Legislation

  • (In a sustainability-based accounting system, health and medical damages resulting from improper disposal would be placed under disposal/future costs', which is one of the three major costs a business should strive to eliminate as depicted at the bottom of diagram A-2 on page 5 of the Introduction. ) Of course, raising money isn't the only function taxes perform.
  • Equally as mind-boggling is the fact that the more a person works the more taxes he or she pays (in the USA alone, two-thirds of personal income tax – which constitutes 80% of the tax funds raised by the US government – is derived from the sale of labour).