Chapter 13 : Fiscal policy and supply-side policies Flashcards
(21 cards)
What is direct tax ?
Direct tax is is taxes on income, profits and wealth paid directly by the bearer to the tax authorities.
What is indirect tax ?
Indirect tax is taxes on expenditure and are paid to the tax authorities by the consumer indirectly for goods and services.
Ex: Vat
What is ad valorem tax ?
Ad valorem tax is tax imposed on a tax on a good or asset based on its value.
What is specific tax ?
Specific tax is a fixed amount of tax charged per unit.
What is pink tax ?
Pink tax is charging tax on women for products that they need.
Ex: Sanitary products
What is marginal tax ?
Marginal tax is tax paid on the last pound of income earned.
How is average tax calculated ?
Total tax paid / Total income
What is tax evasion ?
Tax evasion is committing illegal acts to avoid paying taxes.
What is tax avoidance ?
Tax avoidance is avoiding paying taxes legally but still following the rules.
What is capital gains tax ?
Capital gains tax is tax on the profit when you sell something that’s increased in value.
What is speculation ?
Speculation is when you buy something with the intention of it increasing its price and gaining money through that.
What is the deficit rule ?
To eliminate the structural deficit within 5 years.
What is the debt rule ?
To ensure that the national debt is falling as a % of GDP.
What is deadweight debt ?
Debt that is incurred to meet current needs.
What is reproductive debt ?
Debt that are expected to pay their way by creating assets.
What is sovereign Debt ?
Debt that is issued by a country’s government to borrow money.
When does a sovereign debt crisis happen ?
When a country is unable to pay its bills.
What is sovereign default ?
When a government suspends debt repayments.
What is a debt restructuring plan ?
When the government agrees with other countries or unilaterally reduces their debt.
What is cyclical budget deficit ?
A result of where you are in the economic cycle.
What is structural budget deficit ?
Results from structural changes not the economic cycle.
