Fiscal Policy and the Budget (Leaving Cert Economics): Flashcards

Govt using spending & taxation to influence economy

Taxes on income & wealth (Income Tax, USC, Corp Tax, CGT)

Taxes on goods & services (VAT, excise duties, carbon tax)

€24bn, 27% of total tax revenue

Day-to-day govt running costs (wages, welfare, services)

Long-term investment (infrastructure, broadband, energy)

Expenditure exceeds revenue

Revenue exceeds expenditure

↑ spending or ↓ taxes to boost demand

↓ spending or ↑ taxes to slow demand

Govt borrowing raises rates, reducing private investment

Below 3% of GDP

60% of GDP

12.5%, rising to 15%

Planning & implementation delays reduce effectiveness