Government Revenue Economics 120. There is a saying that only two things in life are certain: death...
-
Upload
ophelia-white -
Category
Documents
-
view
214 -
download
0
Transcript of Government Revenue Economics 120. There is a saying that only two things in life are certain: death...
Government RevenueGovernment Revenue
Economics 120Economics 120
There is a saying that There is a saying that only two things in life only two things in life are certain: death and are certain: death and
taxes.taxes.
Government RevenueGovernment Revenue
Tax: money paid to a government to Tax: money paid to a government to fund its programs and services.fund its programs and services.
The taxation powers of the The taxation powers of the government are contained in the government are contained in the Constitution Act, 1867. Constitution Act, 1867. gives unlimited taxing powers to the gives unlimited taxing powers to the
federal government, but restricts the federal government, but restricts the provincial government to collecting only provincial government to collecting only direct taxes.direct taxes.
Government RevenueGovernment Revenue
Direct Tax - imposed on the person Direct Tax - imposed on the person who is intended to pay the tax who is intended to pay the tax Example: Income taxExample: Income tax
Indirect Tax - levied against one Indirect Tax - levied against one person in the expectation that it will person in the expectation that it will be paid by another person be paid by another person Example: Excise taxExample: Excise tax
Federal Government RevenueFederal Government Revenue
Personal Income Tax (about 46% of Personal Income Tax (about 46% of gov’t revenue)gov’t revenue)
Corporate Income TaxCorporate Income Tax Other taxes Other taxes
excise taxes, customsexcise taxes, customs Non-tax sources Non-tax sources
profit from Crown corporations, social profit from Crown corporations, social assistance payments, interest on loans, assistance payments, interest on loans, revenue from licensesrevenue from licenses
Provincial Government RevenueProvincial Government Revenue
Personal Income TaxPersonal Income Tax Corporate Income TaxCorporate Income Tax Sales TaxSales Tax Excise Taxes Excise Taxes
alcohol, cigarettes, gasolinealcohol, cigarettes, gasoline Property Taxes (municipal Property Taxes (municipal
governments)governments)
Provincial Government RevenueProvincial Government Revenue
Equalization Payments: payments to Equalization Payments: payments to provinces to ensure it can provide a provinces to ensure it can provide a reasonable level of public services without reasonable level of public services without resorting to extremely high levels of resorting to extremely high levels of taxationtaxation 2000-2001 – $5689/person2000-2001 – $5689/person
Stabilization Payments: meant to ensure Stabilization Payments: meant to ensure that provincial taxation revenues do not that provincial taxation revenues do not fall substantially from one year to the fall substantially from one year to the next.next.
Approaches to Tax CollectionApproaches to Tax Collection
Progressive TaxProgressive Tax – the percentage of – the percentage of income an individual pays in taxes income an individual pays in taxes increases as the individual’s level of increases as the individual’s level of income increases.income increases.
Proportional TaxProportional Tax – the percentage of – the percentage of income paid in taxes remains income paid in taxes remains constant regardless of an individual’s constant regardless of an individual’s level of income.level of income.
Approaches to Tax CollectionApproaches to Tax Collection
Regressive TaxRegressive Tax – the percentage of – the percentage of income paid in taxes decreases as income paid in taxes decreases as the level of income increases.the level of income increases.
Note: Regardless of which approach Note: Regardless of which approach is used, individuals with more income is used, individuals with more income will pay more in income taxes. In will pay more in income taxes. In Canada, the progressive form of Canada, the progressive form of taxation is used on income.taxation is used on income.
Federal Revenue 2002Federal Revenue 2002
Personal Income Tax
Corporate Income Tax
Payments to non-residents
General Sales Tax
Gas/Auto Tax
Alcohol/Tobacco Tax
Customs
Other Consumption Tax
Health and Social Insurance
Investment Income
Sales of goods/services
Misc Taxes
Other Revenue
Federal Gov’t SpendingFederal Gov’t Spending
Social ServicesSocial Services Old age security, child tax benefit Old age security, child tax benefit
program, EI, welfare, veteran’s benefitsprogram, EI, welfare, veteran’s benefits DebtDebt EducationEducation Foreign AffairsForeign Affairs HealthHealth TransportationTransportation
Federal Gov’t Spending 2001-2Federal Gov’t Spending 2001-2
Social Services
Debt
Protection
Industrial Development
General Services
Education
Foreign Affairs
Recreation/Culture
Labour, Employment, Immigration
Research
Health
Transportation/communications
Housing
Environment
Planning/development
Other
Provincial and LocalProvincial and Local
HealthHealth EducationEducation Social WelfareSocial Welfare Debt PaymentsDebt Payments
Provincial Gov’t Spending 2001-2Provincial Gov’t Spending 2001-2
Health
Education
Social Services
Debt Charges
Industrial Development
Transportation/communications
Protection
General services
Transfers
other