Government income and expenditure
Main areas of spending:
Law and order (police, courts and prisons)
Debt interest- loans that need paying off.
Main areas of income
Value added tax (VAT)
Indirect taxes can be avoided. Direct taxes hurt you directly.
Direct taxes- normally more money, can be disincentives.
Indirect taxes- you get the choice.
Redistribution of income.
Distribution of income- how incomes are shared out among the people of the country.
Redistribution of income- a policy to reduce the inequalities of income so that incomes are distributed more evenly.
Inequalities of income- incomes are distributed evenly so that some people have a much higher income than others.