Created by John O'Driscoll
almost 9 years ago
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Question | Answer |
BUDGET TIP | Honohan warned the Minister about the dangers of basing his spending plans for next year on tax revenues which may turn out to be windfall (once-off) gains. |
BUDGET TIP 2 | BUDGETS always need careful monitoring to ensure that a massive gap between tax and spending doesn’t suddenly open up once again requiring another bout of savage retrenchment (cut-back) measures. |
budget tip 3 (see tip 1) | The Revenue Commissioners told the Government a surge in corporation tax payments recorded in October’s exchequer returns was the result of strong trading conditions rather than one-off factors. (Irish Times, Nov 15) |
monetary policy | actions taken by central banks that influence supply of money, interest rates & availability of credit |
fiscal policy | government actions around their spending (expenditure) and tax policies (revenue) |
current spending | monies spent on day-to-day items, e.g. public servants/employees' wages; social welfare payments |
capital spending | monies set aside for infrastructure necessary for a productive economy/social good, such as schools, hospitals, road-building |
current budget deficit | day-to-day spending is greater than current govt. tax revenue |
current budget surplus | govt revenue exceeds current spending |
balanced current budget | day-to-day spending = govt. revenue |
inflationary budget | govt spending increasing or taxation is decreasing - the govt is putting more money into the economy (Budget 2016) |
deflationary budget | govt. spending decreasing and/or taxation increasing |
neutral budget | neither inflationary or deflationary - ie won't be any danger of causing overheating ie too much money racing around economy nor any danger of dampening consumer activity in the economy |
revenue buoyancy | govt revenue/income/tax returns have proven to be better than what was expected. {this was certainly the case for 2015 across income tax, VAT & corporation tax) |
Exchequer borrowing requirement | govt borrowing to finance a current (day-to-day) deficit and borrowing for capital (infrastructure)purposes |
Public sector borrowing requirement | exchequer borrowing + borrowing for semi-states (ESB) and local authorities(Tipp Cty Cncl) |
National debt | debt built up to date and outstanding debt |
debt/gdp | debt as a percentage of gdp |
National Treasury Management Agency (NTMA) | ...is the treasury of the govt and manages assets & liabilities of govt as well as Nat Pension Reserve Fund, NAMA etc sells government bonds(borrows for exchequrer) |
debt/GDP ratio | ...is calculated by dividing general govt debt by GDP EU sets a 60% limit. Govt have exceeded this greatly over the last while; it is declining presently. |
Progressive Tax | tax that takes more tax as the person's income increases, e.g. PAYE, capital gains tax |
regressive tax | a tax that does not take into account people's ability to pay. For example VAT or parking charges are a greater burden to a poorer person than they are to a richer person |
Canons of taxation | Equity, Economy, Certainty & Convenience |
Equity | Are taxes fair? Do they fulfil the role of wealth redistribution? {think progressive v regressive} |
Economy | does the tax collect more than it costs to administer and collect the tax. {NB Irish Water has come in for criticism for failing in this regard - although this is a very politically charged issue) Revenue Commissioners are highly efficient. |
Certainty | Tax revenue should be predictable thus aiding planning ahead by the govt |
convenience | Taxes should not prove inconvenient to pay/collect |
ad valorem tax | more tax is paid as the value of the goods increase eg VAT amount is greater on a computer than it is on a calculator. Stamp duty increases as house prices do |
Taxation as a tool of the govt. | increase tax to discourage smoking levies on plastic bags to help envir't. tax breaks to encourage investment build infrastructure |
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