[2] Personal income serves as an indicator of the real well-being of people and their ability to afford products or services before taxes are applied.
there has been a growing concern about the economy of personal and household income, viewed as a socio-economic unit that binds individuals through relationships that emerge when organizing their shared lives.
According to E. A. Maznaya, the household should be regarded as a system of economic relations between individuals and society and among people who pool their budgets and collectively make decisions.
[8][7] Personal income, which encompasses household and family finances, pertains to the economic relationship involved in generating and utilizing monetary resources to ensure the material and social well-being of society members and their continued existence.
In the context of developed market relations, personal finance is recognized as an independent component of the financial system.
[7][9] Numerous publications have extensively examined this subject, addressing various aspects such as effective management and control of personal expenses using budgets and accounts, strategic allocation of consumption expenditures, planning for taxes, insurance payments, medical care, and debt repayment, as well as income management and strategies for accumulating assets and planning for retirement.
Other important aspects include making informed decisions regarding purchases and borrowing, budgeting for child-rearing, education, insurance, and more.
Another common approach is constructing a Lorenz Curve, a graphical representation of the cumulative percentages of income recipients.
[13] The Gini coefficient is widely used because it satisfies important properties that allow for easy comparison of income inequality between different countries.
[14] Globally, South Africa has the highest Gini coefficient at 0.63,[15] attributed to various factors such as historical apartheid, high unemployment, underdeveloped education, and significant population growth.
[19] Economist Amartya Sen advocates for a broader evaluation of human welfare beyond income, emphasizing capabilities and functionings as important considerations.
As a result, individuals often seek ways to increase their income to afford more goods and improve their overall quality of life.
Tax expenditures have been utilized as tools to promote social and economic objectives, with preferential treatments in housing, pensions, education, and health expenses being among the areas targeted.
[24] In France, for instance, the rise in personal income taxes as a percentage of labor costs was influenced by an increase in surtax rates, but this was partly offset by reduced social security contributions.