Fiscal Drag

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Dictionary Says

Definition of 'Fiscal Drag '

Fiscal drag is an economics term referring to a situation where a government's net fiscal position (equal to its spending less any taxation) does not meet the net savings goals of the private economy. This can result in deflationary pressure attributed to either lack of state spending or to excess taxation.

One cause of fiscal drag is the consequence of expanding economies with progressive taxation. In general, individuals are forced into higher tax brackets as their income rises. The greater tax burden can lead to less consumer spending. For the individuals pushed into a higher tax bracket, the proportion of income as tax has increased, resulting in fiscal drag.

Investopedia Says

Investopedia explains 'Fiscal Drag '

Fiscal drag is essential a drag or damper on the economy caused by lack of spending or excessive taxation. As increased taxation slows the demand for goods and services, fiscal drag results. Fiscal drag is a natural economic stabilizer, however, since it tends to keep demand stable and the economy from overheating.

Because it is an economic stabilizer, fiscal drag can influence economic equality among citizens of the same region.

Search results for

'Fiscal Drag '

  • A Look At Fiscal And Monetary Policy

    http://www.investopedia.com/articles/economics/12/fiscal-or-monetary-policy.asp
    ... could be mitigated by the drag caused by higher interest expenses for borrowers,
    including the government. Another indirect effect of fiscal policy often ...

  • Back to Basics For H&R Block

    http://stocks.investopedia.com/stock-analysis/2008/Back-to-Basics-For-HR-Block-HRB-INTU1210.aspx
    ... makes nearly all of its money during tax season in the fiscal fourth quarter ... out
    that the financial advisory business sold to Ameriprise had been a "drag on the ...

  • Dollar Tree Is In A Sweet Spot

    http://stocks.investopedia.com/stock-analysis/2010/Dollar-Tree-Is-In-A-Sweet-Spot-DLTR-FDO-DG-NDN-BIG-COST-M-KSS-SHLD0524.aspx
    ... estimates project a 25 percent increase quarter-over-quarter and for the fiscal
    year ... Euro mess becomes a strong enough contagion or just enough of a drag on the ...

  • A Mixed Menu At Yum! Brands

    http://stocks.investopedia.com/stock-analysis/2010/A-Mixed-Menu-At-Yum-Brands-YUM-JACK-CMG-WEN-BKC0416.aspx
    ... Expects to open 500 stores in China during its fiscal period and end the year ... is
    well above the industry average and doesn't properly reflect the drag that the ...

  • Liz Claiborne's Numbers Don't Add Up

    http://stocks.investopedia.com/stock-analysis/2010/Liz-Claibornes-Numbers-Dont-Add-Up-LIZ-JNJ-TRLG-VFC-RL-JCP-GPS-JCG0226.aspx
    ... Flash-forward to its latest fiscal year ended January 2, 2010, and sales were $3 ...
    Canadian Mexx stores, which he refers to as "our biggest drag on profitability ...

  • Sysco Not Sizzling, Yet

    http://stocks.investopedia.com/stock-analysis/2010/Sysco-Not-Sizzling-Yet-SYY-WEN-DIN-MCD-TSN-SFD0818.aspx
    ... The Quarter That Was Reported revenue was up 13.9% in the fiscal fourth quarter,
    but that ... although a bit of a pause in the restaurant market is a drag on near ...

  • 5 Steps Of A Bubble

    http://www.investopedia.com/articles/stocks/10/5-steps-of-a-bubble.asp
    ... $28.6 million on revenues of $30 million in its most recent fiscal year, investors ...
    9% on concern that potential sales by company insiders could drag down the ...

  • Investopedia's Forex Outlook For May 2012: Macroeconomic ...

    http://www.investopedia.com/university/monthly-forex-report-may-2012/
    ... energy spending this winter, but higher gasoline prices could put a drag on consumer ...
    The government expects the economy to expand 1.9% for the fiscal year. ...

  • Investopedia's Forex Outlook For May 2012: Macroeconomic ...

    http://www.investopedia.com/university/monthly-forex-report-may-2012/macroeconomic-highlights.asp
    ... energy spending this winter, but higher gasoline prices could put a drag on consumer ...
    The government expects the economy to expand 1.9% for the fiscal year. ...

  • Worries About Tomorrow Sink Hewlett-Packard Today

    http://stocks.investopedia.com/stock-analysis/2011/Worries-About-Tomorrow-Sink-Hewlett-Packard-Today-HPQ-IBM-DELL-CSCO-EMC0519.aspx
    ... Profitability was also pretty solid in the fiscal second quarter. ... software, services
    and printing were margin leaders, while the PC business was a drag. ...

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