Leonardo Martin T. Fontanilla James Laurence M. Ejanda Christine Joy D. Espiritu Jeeno T. Ramirez Mark Christian B.

Raquino

 Is the use of governments expenditure and

revenue collection (taxation) to influence the economy. Governments wise management of raising revenues. Economic policy concerned with raising of resources through: 1) Taxation 2)Borrowing Goverments wise decision on spending pattern

1)

INCOME EARNER THROUGH ITS AGENCIES AND GOVERNMENT CORPORATION INCOME FROM BUREAU OF INTERNAL REVENUE AND BUREAU OF CUSTOMS LAND BANK, DBP, BSP, SSS AND GSIS.

2) GOVERNMENT CONSUMPTION OF GOODS AND SERVICES REFLECTED IN GNP

3) EMPLOYER EMPLOYS ALMOST 10% OF THE LABOR FORCE

4) BORROWER FROM LOCAL OR FOREIGN SOURCES ISSUES GOVERNMENT BONDS (TREASURY BILLS)

 BEST GOVERNMENT IS ONE THAT TAXES THE

LEAST THE ONE THAT SPENDS LEAST

1)

DISCRETIONARY FISCAL POLICY DELIBERATE MANIPULATION OF GOVERNMENT SPENDING OR TAXATION IN ORDER TO PROMOTE FULL EMPLOYMENT AND PROMOTE PRICE STABILITY

2) AUTOMATIC STABILIZER STRUCTURAL FEATURES OF GOVERNMENT SPENDING AND TAXATION SMOOTHEN FLUCTUATION IN DISPOSABLE INCOME OVER THE BUSINESS CYCLE STIMULATE AGGREGATE DEMAND DURING PERIODS OF RECESSION DAMPEN AGGREGATE DEMAND DURING PERIODS OF RECESSION.

 1.REVENUE AND CAPITAL ACCOUNTS

BUDGET ANTICIPATED OR ESTIMATED ACCOUNT OF GOVERNMENT RECEIPTS AND EXPENDITURES IN THE NEXT FINANCIAL YEAR. -TWO COMPONENTS a) REVENUE AND CAPITAL CONSISTS OF RECEIPTS FROM TAX COLLECTION DEBT LIABILITIES AND PAYMENT OF INTERESTS ON LOANS.

B) BUDGETARY SURPLUS REVENUE RECEIPTS EXCEED EXPENDITURES C) BUDGET DEFICIT REVENUE RECEIPTS FALL SHORT OF THE PROPOSED EXPENDITURES D) BALANCED BUDGET RECEIPTS EQUAL TO EXPENDITURES

1) BORROWING (SELLING INTEREST BEARING BONDS) FROM THE PUBLIC 2) ISSUING NEW MONEY TO ITS CREDITORS (MONEY CREATION) -THOUGH EXPANSIONARY, IT IS INFLATIONARY

 PART I GENERAL PRINCIPLES

1)

TAXATION POWER INHERENT IN EVERY SOVEREIGN STATE TO IMPOSE A CHARGE OR BURDEN UPON PERSONS, PROPERTIES, OR RIGHTS TO RAISE REVENUES FOR THE USE AND SUPPORT OF THE GOVERNMENT TO ENABLE IT TO DISCHARGE ITS APPROPRIATE FUNCTIONS.

A) AS TO WHO BEARS THE BURDEN

1) DIRECT TAX THE TAX IS IMPOSED ON THE PERSON WHO ALSO BEARS THE BURDEN. 2) INDIRECT TAX IMPOSED ON THE TAX PAYER WHO SHIFTS THE BURDEN OF TAX TO ANOTHER.

B) AS TO GRADUATION OF RATE 1) PROPORTIONAL BASED ON A FIXED PERCENTAGE RATE OF THE AMOUNT OF THE PROPERTY, INCOME OR OTHER BASIS TO BE TAXED. 2) PROGRESSIVE OR GRADUATED TAX RATE INCREASES AS THE TAX BASE OR BRACKET INCREASES 3) REGRESSIVE TAX RATE INCREASES AS THE TAX BASE INCREASES

4) DEGRESSIVE INCREASE OF RATE IS NOT PROPORTIONATE TO THE INCREASE OF TAX BASE.