Government Income + Expenditure

Question 1

What are the 2 diffrent types of tax?

Answer 1

Direct tax
Indirect tax

Question 2

What is direct tax?

Answer 2

tax taken directly from your wage before its paid e.g income tax

Question 3

Whats indirect tex?

Answer 3

tax paid by firms to produce goods/services e.g VAT

Question 4

Name 7 different types of tax

Answer 4

National Insurance
Income tax
Council tax
Stamp tax - tax on buying a house
VAT
corporation tax - tax on company profits
excise tax - taxes on specific goods

Question 5

What are 3 purposes of tax?

Answer 5

-redistribute income
-raise revenue for the government
-discourage consumption for certain goods

Question 6

What dis progressive tax?

Answer 6

taxes a higher % on high income earners

Question 7

What is regressive tax?

Answer 7

takes a higher % of income from low earners

Question 8

Name four impacts on an increased rate of income tax

Answer 8

-higher revenue for the government
-makes taxes more progressive
-creates disincentive to work
-encourages tax evasion

Question 9

Name 5 impacts of increased government spending

Answer 9

more investment in public goods
provide public goods
investment in infrastructure
redistribution

Question 10

What’s a negative impact of providing benefits?

Answer 10

creates disincentives to work

Question 11

Why may the government sector be less efficent than a priavte sector

Answer 11

there’s no profit motivator