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WorksheetsBO6MA Module 5
Total questions: 10
Worksheet time: 6mins
The triangle of tax revenue, borrowings and expenditures mean that governments have three mechanisms with which to fund a deficit. These are:
increasing borrowings
raising taxes
spending less
all of the above
It is generally defined as the policy to use government revenue (taxes) and government expenditure to influence the market (the economy).
Tax Policy
Fiscal Policy
Monetary Policy
Tax Law
This is a subset of fiscal policy examining the revenue side of fiscal policy
Tax Policy
Fiscal Policy
Monetary Policy
Tax Law
For a government charge to be considered a tax, there are some common traits observable in all taxes:
a tax is to be used for a limited purpose
a tax is not a compulsory charge
a tax is imposed by legislation
tax is usually not tied to a specific service to be provided to the individual paying the tax
In assessing whether tax is justified, numerous theories have evolved over the years including:
the social contract
the sacrifice theory
the benefit theory
an emergency levy
individuals and corporate entities play a role in the economy, being the _________________________ that generates income and wealth
providers of goods and services
generators of the productive goods and services
generators of the economic productive activity
all of the above
The purposes for which taxes may be levied can be grouped into various categories. The most commonly used categories include
state building
guiding behavior in society
creating lesser equality through redistributive functions
providing other private goods and services
The influence of the global economy and global society can also be perceived as a need for taxation which has been termed
internal management
negotiated expansion
additional taxation
none of the above
The fact that taxes are raised by the state in terms of the enacted law implies that there should be some limitation to tax as well. Three key principles emerge, namely the following:
taxes should not exceed that which is needed to fund the public needs
taxes should not erode capital
if tax costs more than what the levied tax would collect, it should not be levied
tax should not be compulsory
These form the three points of the budgetary triangle of government funding.
Individual, state, and economy
Taxes, government and expenditures
Taxes, borrowings and expenditures
None of the abovew
