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4.5 (Changes in direct & indirect taxes (Incentives to work & tax…
4.5
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Types of payment
Current expenditure
Spending which recurs, this is on G&S which are consumed and last for a short period of time
Capital expenditure
Spent on assets, which can be used mulitple times
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Types of tax
Proportional
Has a fixed rate for all tax payers, regardless of income
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Regressive
Does not relate to income, but the poorest pay the highest tax
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Types of deficits
Cyclical deficit
A temporary deficit, which is related to the business cycle. A deficit might occur during recessions
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