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Income
a flow of fonds referring to amount of money, benefits, other transfers of value over a set period of time by individuals or entitities
the more income, the greater the capacity for building wealth over time
elements making up icnome
private income, pensions and benefits, direct and inderict taxes, indirect benefits
factors explaining why there is wealth and income inequality
personal traits,
other factors (sickness/involuntary unemployment),
occupational conditions (education, training, work responsibility),
opportunity (socio-economic and family background)
direct v.s. indirect taxes
direct: collected from the taxpayers income and paid directly to the government e.g. income tax
indirect: collected from consumer spending (higher prices passed on by the business, who then pays it to the gov’t e.g. GST and excise duty
criteria to evaluate a tax system
fair- people on the same income should pay the same tax
simple
efficient- collected easily
types of public spending
direct transfer: payment made without the production of goods taking place a.g. pension and welfare benefit. used to provide direct income support to weaker groups, and social security/welfare accounts for most of commonwealth spending.
