Public Finance Flashcards
Asserts that those with equal ability to pay should
pay equal taxes.
Horizontal Equity
Suggests that those with greater needs should
receive more from government (expenditure side)
and those with greater “ability to pay” should pay
more (taxation side)
Gauges the relationship between income and
effective rates. (Regressive or Progressive)
Vertical Equity
Suggests that programs should avoid making
someone better off if they will result in making
someone else worse off (efficiency loss).
Some are better off but there are no losers.
Efficiency
Holds that individuals are entitled to the product of
their labor and to a fair return on their savings.
Individual Equity
Requires that policy and its implementation
should be simple for those complying and those
administering.
Simplicity
Requires that taxes be collected to provide
revenues sooner or later to pay for the costs of
government.
Revenue Raising
Refers to measures employed by governments to stabilize the economy, specifically by manipulating the levels and allocations of taxes and government expenditures.
Fiscal Policy
structure of taxation + level and
composition of public expenditure
Fiscal Policy
how the
government gets its funds
Government Revenue Policy
how it
allocates its revenue among different uses
Government Expenditures Policy
how it manages
the public debt
Debt Management Policy
cover proceeds from sales of
fixed capital asset or scraps like sales of public
bonds, buildings and other structures.
Capital revenues
re-payment of loans
and advances made by government corporations
and local governments.
Extraordinary income
covers proceeds of re-payable
obligations generally with interest from domestic
and foreign creditors of government.
Public borrowing
government issued
bonds.
Domestic borrowings
