Role of government

How does government influence the economy?

Through taxes, expenditures, transfers, and regulations.

What types of taxes are raised by the Irish economy?

Income tax, consumption tax, business tax, and wealth tax.

What is an example of a consumption tax in Ireland?

VAT (Value Added Tax) with rates of 0%, 4.8%, 9%, 13.5%, and 23%.

What is corporation tax?

A tax on the profits of businesses, represented as a percentage of profits.

What is vertical equity in taxation?

The principle that those with a greater ability to pay should pay higher rates.

What is horizontal equity in taxation?

The principle that similar individuals should pay similar rates.

What is the benefits principle in taxation?

The idea that those who benefit from government services should pay for them.

What is the purpose of government spending?

To redistribute money, provide public goods, and deliver essential services.

What is the effect of too much regulation on firms?

It discourages firms from operating efficiently.

What is the effect of too little regulation on consumers?

It can reduce consumer welfare.

What characterizes regressive taxes?

They decrease as income increases.

What defines proportional taxes?

They remain the same regardless of income levels.

What characterizes progressive taxes?

They increase as income increases.

What is the Capital Acquisitions Tax?

A tax on the value of assets acquired from a deceased person.

What is local property tax?

A tax based on the value of property owned within a local jurisdiction.

What are some types of wealth taxes?

Capital acquisitions tax, capital gains tax, DIRT (deposit interest retention tax), and dividend withholding tax.