<p>No, taxes are either:</p>
<ul>
<li>used for transfers between individuals. One person has less to spend on consumption or investment but other person has more.</li>
<li>government income also counts as a disposable income of a nation.</li>
</ul>

CC BY-SA 4.0
2023-10-20T14:29:11.420Z
Thank you for answering. But is that a legit reason, because most textbooks use the example of deducting income tax from income received to arrive at disposable income.
112120
CC BY-SA 4.0
2023-10-20T15:12:16.050Z
@112120 I am pretty sure that those textbooks talk about *consumer* disposable income. For a consumer you need to subtract tax from income to get disposable income because consumer cannot use income that is being taxed away by the government. But your question is about *national* disposable income. Government is part of a nation.
Leeh Mizrahi
CC BY-SA 4.0
2023-10-20T11:24:28.417Z
2023-10-20T11:24:28.417Z
Leeh Mizrahi
<p>GNDI- Gross National Disposable Income; GNI- Gross National Income
We know that GNDI = GNI + Net Current Transfers from ROW(rest of world).
What I don't understand is why is there no mention of direct taxes in this formula? Since GNI is arrived at using factor income and not primary income, aren't we supposed to subtract the direct tax paid from the GNI to arrive at GNDI since the money paid as taxes is not available for spending or saving ?</p>

<gdp><accounting><national-accounts><national-income><gnp>
Confusion in the relationship between GNDI and GNI
112120
# Confusion in the relationship between GNDI and GNI

(Asked by: username_0 on 2023-10-19)

GNDI- Gross National Disposable Income; GNI- Gross National Income
We know that GNDI = GNI + Net Current Transfers from ROW(rest of world).
What I don't understand is why is there no mention of direct taxes in this formula? Since GNI is arrived at using factor income and not primary income, aren't we supposed to subtract the direct tax paid from the GNI to arrive at GNDI since the money paid as taxes is not available for spending or saving ?

**Tags:** gdp, accounting, national-accounts, national-income, gnp

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## 1 answers

### Answer by username_1 on 2023-10-20. Score: 2 | Accepted answer

No, taxes are either:

* used for transfers between individuals. One person has less to spend on consumption or investment but other person has more.
* government income also counts as a disposable income of a nation.

> **Comments:**
> **username_0**: Thank you for answering. But is that a legit reason, because most textbooks use the example of deducting income tax from income received to arrive at disposable income.  
> **username_1**: @112120 I am pretty sure that those textbooks talk about *consumer* disposable income. For a consumer you need to subtract tax from income to get disposable income because consumer cannot use income that is being taxed away by the government. But your question is about *national* disposable income. Government is part of a nation.  

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