ECON 1000 Lecture Notes - Lecture 12: Deficit Spending, Tax Incidence, Deadweight Loss
16 Nov 2016
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Document Summary
Governments can improve on market outcomes in some circumstances. But provision of public goods requires taxation. Look at different forms taxation, costs and distribution. Efficient taxation: imposed as small a cost on society as possible. Size of government sector has grown since 1961. Federal government makes transfers to provinces to help with program provision. 1) collects just under 40% of taxes in canada. Marginal tax rate applied to each additional $ of taxable income. Corporate taxes are levied on corporation profits. Excise taxes are sales on specific goods. El payroll taxes are a tax on wages paid by firms and workers to finance el program. Taxable income = total income - deductions. In 2010-11 spending was about per person. This is greater than the revenue figure of . In this case the federal government ran a budget deficit. Surplus minus deficit = tax receipts minus spending. When revenues exceed spending the government runs a surplus.
