Sliding scale fees
Sliding scale fees are variable prices for products, services, or taxes based on a customer's ability to pay. Such fees are thereby reduced for those who have lower incomes, or alternatively, less money to spare after their personal expenses, regardless of income. Sliding scale fees are a form of price discrimination or differential pricing.
A business or organization may have various motivations for pricing a product or service on a sliding scale. These may include the desire to be charitable to those less able to afford the product or service, their ability to get a tax deduction for offering their services as charity, their ability to benefit from the revenue even from a partial payment, their retention of a longtime customer/client, or referrals that such a customer/client may provide.
For example, medical fees may depend on a patient's income. Andrew Carnegie imposed this on his workers during the Homestead Strike. Some child-adoption agencies collect legal fees (normally very expensive) on a sliding scale, so that couples across a wider range of incomes are able to adopt children. Sliding-scale fees are also often charged by lawyers, places of worship, and for tuition at educational institutions.
|This economics-related article is a stub. You can help Wikipedia by expanding it.|