Chapter 16~The National Budget Flashcards
Income tax?
A tax paid by employees on their income
Corporation tax?
A tax paid by companies on their profits
Value added tax (VAT)?
Tax included in the price of goods and services
Deposit interests retention tax (DIRT)?
A tax on the interest earned by people on their savings
Custom duty?
A tax on goods coming in to Ireland from certain other countries
Excise duty?
A tax on cigarettes, alcohol, and petrol
Current income?
Money received by the government on a regular basis e.g. taxation
Capital income?
Money received by the government on a once off faces e.g. EU grants
Current expenditure?
Government spending on the day-to-day running of the country e.g. social welfare payments
Capital expenditure?
Government spending on long-term projects e.g. Building schools, hospitals.
Surplus budget?
A budget were planned total income is greater than planned total expenditure
Deficit budget?
A budget where planned total income is less than planned total expenditure
Debt Servicing?
The paying off of the interest part of Ireland’s national debt
Opportunity cost?
When the government decides to spend money on a particular project some other project has to do without funds. The project sacrificed is the opportunity cost e.g. when the government decides to spend money on building a school rather than the hospital, the hospital is the opportunity cost
Limited/scarce resources?
The government has limited income. It does not possess an endless fund to see satisfy the demands made on it I.E it has limited resources
5 state owned companies
- an post(postal service)
- RTE (Tv and radio)
- CIE (transport services)
- bord bia (food and drink promotions)
- failte Ireland (promoting tourism)
current income for the government
- income tax
- excise duties
- corporation tax
- VAT
- DIRT
- custom duties
Capital income for the government
- EU grants
2. sale of semi-state bodies
Current expenditure for the government
- Social welfare payments
- wages to public sector workers
- hospital running costs
Capital expenditure for the government
- building new roads
- building new schools
- buying new Garda vehicles
2 ways the government can deal with the budget deficit
- increase taxes e.g income tax
- reduce spending on social welfare
2 Ways the government can deal with a budget surplus
- reduce some taxes e.g income tax
- spend more on social welfare
National budget?
A document that is a detailed breakdown of government income and expenditure for the next year (produced by the Department of Finance)
