Restated, consumption expenditure plus savings equals disposable income[3] after accounting for transfers such as payments to children in school or elderly parents’ living and care arrangements.[4]
The marginal propensity to consume (MPC) is the fraction of a change in disposable income that is consumed. For example, if disposable income rises by $100, and $65 of that $100 is consumed, the MPC is 65%. Restated, the marginal propensity to save is 35%.
For the purposes of calculating the amount of income subject to garnishments, United States' federal law defines disposable income as an individual's compensation (including salary, overtime, bonuses, commission, and paid leave) after the deduction of health insurance premiums and any amounts required to be deducted by law. Amounts required to be deducted by law include federal, state, and local taxes, state unemployment and disability taxes, social security taxes, and other garnishments or levies, but does not include such deductions as voluntary retirement contributions and transportation deductions. Those deductions would be made only after calculating the amount of the garnishment or levy.[5] The definition of disposable income varies for the purpose of state and local garnishments and levies.
National disposable income of a country: The national income minus current transfers (current taxes on income, wealth etc., social contributions, social benefits and other current transfers), plus current transfers receivable by resident units from the rest of the world.[6]
Disposable personal (or family/household) income: The income that individuals or households have for their spending.
Discretionary income
Discretionary income is disposable income (after-tax income), minus all payments that are necessary to meet current bills. It is total personal income after subtracting taxes and minimal survival expenses (such as food, medicine, rent or mortgage, utilities, insurance, transportation, property maintenance, child support, etc.) to maintain a certain standard of living.[7] It is the amount of an individual's income available for spending after the essentials have been taken care of:
Discretionary income = gross income – taxes – all compelled payments (bills)
The term "disposable income" is often incorrectly used to denote discretionary income. For example, people commonly refer to disposable income as the amount of "play money" left to spend or save. The Consumer Leverage Ratio is the expression of the ratio of total household debt to disposable income.[citation needed]
^(PDF). Archived from the original (PDF) on 2015-10-14. Retrieved 2017-12-07.
^Ruser, John; Pilot, Adrienne; Nelson, Charles. (PDF). U.S. Bureau of Labor Statistics. Archived from the original (PDF) on 2014-06-11. Retrieved 2013-08-23.
^Linden, Fabian (1998). "A Marketer's Guide to Discretionary Income (abstract)". US Department of Education. Retrieved 2007-12-27.
External links
—even though this says it's measuring "disposable income," using the economist's language, it's discretionary income.
Eurostat, News Release No. 60/2010, , 30 April 2010
Eurostat, Statistics Explained, Glossary article: National Disposable Income
OECD Disposable income statistics
Google – public data: GDP and Personal Income of the U.S. (annual): Disposal Personal Income
Google – public data: GDP and Personal Income of the U.S. (annual): Disposal Personal Income per capita
July 20, 2023
disposable, discretionary, income, disposable, income, redirects, here, album, snuff, disposable, income, album, disposable, income, total, personal, income, minus, current, income, taxes, national, accounts, definitions, personal, income, minus, personal, cur. Disposable income redirects here For the album by Snuff see Disposable Income album Disposable income is total personal income minus current income taxes 1 In national accounts definitions personal income minus personal current taxes equals disposable personal income 2 Subtracting personal outlays which includes the major category of personal or private consumption expenditure yields personal or private savings hence the income left after paying away all the taxes is referred to as disposable income Median American household disposable income Not including Sales tax or property taxDenmark disposable income after tax Not including Value added tax or Property taxGermany disposable income after taxes Not including Value added tax or Property taxRestated consumption expenditure plus savings equals disposable income 3 after accounting for transfers such as payments to children in school or elderly parents living and care arrangements 4 The marginal propensity to consume MPC is the fraction of a change in disposable income that is consumed For example if disposable income rises by 100 and 65 of that 100 is consumed the MPC is 65 Restated the marginal propensity to save is 35 For the purposes of calculating the amount of income subject to garnishments United States federal law defines disposable income as an individual s compensation including salary overtime bonuses commission and paid leave after the deduction of health insurance premiums and any amounts required to be deducted by law Amounts required to be deducted by law include federal state and local taxes state unemployment and disability taxes social security taxes and other garnishments or levies but does not include such deductions as voluntary retirement contributions and transportation deductions Those deductions would be made only after calculating the amount of the garnishment or levy 5 The definition of disposable income varies for the purpose of state and local garnishments and levies Contents 1 Meanings of disposable income 2 Discretionary income 3 See also 4 References 5 External linksMeanings of disposable income EditDisposable income can be understood as National disposable income of a country The national income minus current transfers current taxes on income wealth etc social contributions social benefits and other current transfers plus current transfers receivable by resident units from the rest of the world 6 Disposable personal or family household income The income that individuals or households have for their spending Discretionary income EditDiscretionary income is disposable income after tax income minus all payments that are necessary to meet current bills It is total personal income after subtracting taxes and minimal survival expenses such as food medicine rent or mortgage utilities insurance transportation property maintenance child support etc to maintain a certain standard of living 7 It is the amount of an individual s income available for spending after the essentials have been taken care of Discretionary income gross income taxes all compelled payments bills The term disposable income is often incorrectly used to denote discretionary income For example people commonly refer to disposable income as the amount of play money left to spend or save The Consumer Leverage Ratio is the expression of the ratio of total household debt to disposable income citation needed See also EditList of countries by disposable incomeReferences Edit Income Data Quality Issues in the Annual Social and Economic Supplement to the Current Population Survey PDF Archived from the original PDF on 2015 10 14 Retrieved 2017 12 07 Ruser John Pilot Adrienne Nelson Charles Alternative Measures of Household Income BEA Personal Income CPS Money Income and Beyond PDF U S Bureau of Labor Statistics Archived from the original PDF on 2014 06 11 Retrieved 2013 08 23 https portal wsiz rzeszow pl plik aspx id 12166 dead link Research Publications www parl gc ca Archived from the original on 21 August 2007 Retrieved 27 May 2017 31 CFR 285 11 Legal Information Institute Cornell University Retrieved June 29 2012 Glossary National disposable income Eurostat Retrieved 2021 05 03 Linden Fabian 1998 A Marketer s Guide to Discretionary Income abstract US Department of Education Retrieved 2007 12 27 External links EditA simple discretionary income calculator even though this says it s measuring disposable income using the economist s language it s discretionary income Eurostat News Release No 60 2010 Household Savings and Disposable Income 30 April 2010 Eurostat Statistics Explained Glossary article National Disposable Income OECD Disposable income statistics Google public data GDP and Personal Income of the U S annual Disposal Personal Income Google public data GDP and Personal Income of the U S annual Disposal Personal Income per capita Retrieved from https en wikipedia org w index php title Disposable and discretionary income amp oldid 1119384672, wikipedia, wiki, book, books, library,
