Role of government

How government affects the economy; taxes, expenditures and transfers, regulations

Irish economy raises taxes and various things; income, consumption, businesses, wealth

0,20,40

Consumption tax eg vat 0.4.8,9,13.5,23 stamp duty, registration tax 

Businesses; corporation tax, % of psri

Wealth; capital acquisitions tax, capital gains, dirt,dividend withholding tax,local property tax 

Most tax comes from income

Regressive taxes, decreases with income, 

Proportional same with different incomes

Progressive taxes increases with income

Vertical equity- those who have more ability to pay, pay higher rates

Horizontal equity- similar individuals pay similar rates 

Benefits principle- those who benefit pay 

Government spending money:

Equity- redistributing money

Efficiency- providing public goods 

Provide essential services 

Regulations: EPA, traffic regulations, building codes 

Too much regulation discourages firms

Too little reduces consumer welfare