Government Budget and Finances Terms Flashcards
Transfer Payments
Payments received for which no factor of production has been supplied or offered.
Current Revenue
Tax that is not long-term e.g. (PAYE, Social Welfare)
Privitisation
The sale of state-owned companies to private investors e.g. Aer Lingus, Eircom (Now Eir)
Fiscal Policy
Actions taken by the government that influence the timing, magnitude and structure of current revenue and expenditure
Direct Tax
Taxes on income and wealth e.g. P.A.Y.E, D.I.R.T, Corp. Tax
Indirect Tax
Taxes on transactions/spending e.g V.A.T, Stamp duty
Tax Avoidance
Arranging one’s tax affairs within the law so as to minimise tax liabilities e.g. join a pension scheme
Tax Evasion
Reducing tax liabilities by making false returns or not making any returns at all.
Finance Act
Gives affect to proposed changes in taxation and expenditure proposed by the Minister for Finance in the budget.
- Inflationary effect
- Tax band/rates
Demand-pull Inflation
This is a situation in which demand for a good or service is greater than supply of that good or service. This causes prices to rise e.g. Inflationary Pressure.
Broaden Tax Base
Increase the number of people/areas on which the tax is levied - more caught in tax
e.g. NCT, WATER, PROPERTY CHARGES
Progressive Tax
A progressive tax takes a higher percentage of income from a person as that person’s taxable income increases. This form of taxation takes into account a person’s ability to pay e.g. PAYE
Regressive Tax
A regressive tax takes a higher percentage of income from a low-income earner than from a high-income earner e.g. V.A.T
Black Economy
All economic activity that goes unrecorded in the national income accounts.
Equity
The system of taxation should take a higher proportion o income in tax as taxable income in tax as income rises o the ability of each person to pay must be taken into account.
