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Taxes and Public finance
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A tax (also known as a "duty", or Zakat in Islamic economics) is a
charge or other levy imposed on an individual or a legal entity by a
state or a functional equivalent of a state (e.g., tribes,
secessionist movements or revolutionary movements). Taxes could also
be imposed by a sub national entity. Taxes may be part of a direct tax or indirect tax, and may be paid in money or as corvée labor. In modern, capitalist taxation systems, taxes are levied in money, but in-kind and corvée taxation are characteristic of traditional or pre-capitalist states and their functional equivalents. The means of taxation, and the uses to which the funds raised through taxation should be put, are a matter of hot dispute in politics and economics, so discussions of taxation are frequently tendentious. Public finance is the field of political science / economics that deals with taxation. "Public finance" (government finance) is the field of economics that deals with budgeting the revenues and expenditures of a public sector entity, usually government. Governments, like any other legal entity, can take out loans, issue bonds and invest. Based on the taxing authority of the entity, they issue bonds such as tax increment bonds or revenue bonds. A bond issued by a public sector entity may give tax advantages to its owners. |
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EfficiencyA model of efficient resource useEquity vs efficiency Market efficiency conditions Market failures Pareto efficiency Government efficiency - how efficient are governments at obtaining their objectives? how much of their expenditure actually goes to where it is intended? what types of waste exist? Scope of government activities - what do governments spend money on? what should governments spend money on? what can be left to markets? Why governments should be concerned with externalities, public goods. Externalities and government policyInternalization of externalities Income distributionIncome distribution - How will these government expenditures influence the incomes of one group relative to another group? Government programs like ?disaster relief? transfer wealth to people that have suffered a loss due to natural disaster. Social security transfers wealth from the young to the old. Engaging in a war transfers wealth to certain sectors of society. Public education transfers wealth to families with children in these schools. Public road construction transfers wealth from people that do not use the roads to those people that do (and to those that build the roads).Income Security Employment insurance Health Care |
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