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Taxation & Government Finances

Taxation & Government Finances. National debt/gross domestic product ratio. The income of a country is measured by its GDP (Gross Domestic Product) The ND/GDP ratio reflects our debt as a percentage of what we earn each year.

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Taxation & Government Finances

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  1. Taxation & Government Finances

  2. National debt/gross domestic product ratio • The income of a country is measured by its GDP (Gross Domestic Product) • The ND/GDP ratio reflects our debt as a percentage of what we earn each year. • In the 1990’s the ND/GDP was very high @ 90% which meant that we were borrowing nearly as much as we earned. • During the boom the ratio decreased to 25% due to lower borrowings and a higher GDP. • However the ratio has started to rise again to ??? • Look up!

  3. 2004 Q 8 (b) P 42 • In recent years Ireland’s ND as a percentage of GDP has declined. • Discuss the economic consequences of this development for the Irish Economy. • Note this could be now asked in reverse due to our current economic situation.

  4. Ans to both sides • Annual interest repayments Will decrease as the ratio decreases and increase as the ratio increases. • Government Current Expenditure Will increase as the ratio decreases and decrease as the ratio increases. • Burden on future taxpayers Will decline as the ratio declines and will increase as the ratio increases.

  5. International credit-rating Will improve as the ratio decreases and will disimprove as the ratio increases. • Spending on infrastructure May decrease if the decrease in the ratio is due to less borrowing for capital projects which may inhibit future growth. However If the ratio increases due to increased borrowing for capital projects then spending on infrastructure will increase.

  6. Exam Question Ordinary Level • 2009 Q 4 P 102 • 2008 Q 5 & 6 (a) P 111 • 2007 Q 7 P 121 • 2006 SQ 3 & 4 P 124 & Q 8 (a) (b) P 130 • 2005 SQ 5 P 133 & Q 8 P 138 • 2004 SQ 8 P 141 • 2004 Q 8 (c) P 146 • 2003 Q 5 P 153 • 2002 SQ 9 P 157 & Q 6 P 161 • 2001 SQ 7 P 170

  7. Exam Questions on tax Short Long • 2003 Q 1 Reg Tax P 44 • 2002Q 6 Tax av & evP 52 • 2008 Q 6 • 2007 Q 5 P 20 • 2006 Q 5 (a) (c) P 27 • 2005 Q 4 • 2004 Q 8 • 2001 Q 7 • 1999 Q 5 • 1998 Q 4

  8. Exam Questions onGovernment finances Short LONG • 2006 Q 8 NTMA • 2005 Q 5 PSBR • 1999 Q 5 PSBR • 1998 Q 6 Tax Wedge • 2009 Q • 2007 Q 5 & 8 (c) • 2006 Q 5 (b) • 2004 Q 8 (b) (c) • 2002 Q 7 (b) • 2001 Q 7 • 2000 Q 8 • 1997 Q 7

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