Economics GCSE OCR- How does the UK government raise and spend it's money?

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Government income and expenditure

Main areas of spending:

Social protection

Health

Education

Defense

Law and order (police, courts and prisons)

Debt interest- loans that need paying off.

Main areas of income

Direct taxes

Income tax

National insurance

Corporation tax

Inheritance tax

Indirect taxes

Value added tax (VAT)

Excise duties

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.

Transfer payments-

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