The portal has been deactivated. Please contact your portal admin.

Lesson Flashcards: Components of Public Finance Economics

Principle of maximum social advantage

A principle that states that public expenditure should be structured in a way that maximizes its benefits to society as a whole

Canon of equity

A canon of taxation stating that taxes should be distributed proportionally according to each individual’s ability to pay, resulting in an equitable burden for each taxpayer

Principle of economy

A principle that states that public expenditure should be structured in a way that minimizes waste

Canon of certainty

A canon of taxation stating that the amount of tax an individual taxpayer will be charged in a given time period and the manner of payment should be clearly and consistently defined in advance for the taxpayer

Principle of universality of budget

A principle that states that all revenues and expenses should be individually recorded in the public budget without any links or dependencies or notional offsetting of one against another

Public revenue

The government’s income, largely consisting of the public sector’s surplus, public debt, fees, and taxes

Public finance

The set of fiscal activities of the government, including its revenues, spending, and budgeting

Taxes

The legally required payments for all participants of the economy and the largest source of public revenue

Proportional tax

A tax system in which all individuals pay the same percentage of their incomes as a tax

Local government expenditure

Fiscal spending made by municipal (local) governments, including that for education, emergency services, and city parks

Direct taxes

Taxes that are paid directly to the government by the individuals bearing the tax burdens (e.g., income and property taxes)

The principle of sanction

A principle stating that no public expenditure may occur without prior approval (sanction) by appropriate government officials

Canons of taxation

The canon of equity, the canon of economy, the canon of certainty, and the canon of convenience

Central government expenditure

Fiscal spending made by the national (central) government, including that for national defense and the construction of national infrastructure

Progressive tax

A tax system in which individuals with higher incomes pay a greater percentage of their incomes as a tax

Principle of annuality of public budget

A principle stating that the public budget cycle should repeat each fiscal year, being drawn up, approved, executed, and reviewed in turn

The four main sources of public revenue

Public sector’s surplus, public debt, fees, and taxes

Principle of unity of public budget

A principle stating that both the public expenditures and public revenues should be contained in one document in order to provide a comprehensive view of the government’s activity

Canon of economy

A canon of taxation stating that taxes should be designed to minimize the cost of collection

Political democracy

In the economic sense, a mechanism that aims to prevent the public sector from seeking profits for specific groups of individuals

Canon of convenience

A canon of taxation stating that the collection of taxes should be done in a manner that is simple and uncomplicated for taxpayers

Balanced budget

A budget where a government’s income matches its expenses

Public expenditure

Monetary spending by the government aimed at satisfying the needs of society, such as infrastructure, health, education, and transfer payments

Legislators

The officials in charge of creating laws and who are elected by citizens to represent the will of those citizens

Indirect taxes

Taxes whose burdens are passed onto another entity or individual (e.g., sales tax and value added tax, where a merchant is taxed on the value of goods sold in their store, but the consumer is the one who pays the tax)

The four phases of the public budget

Proposal, approval, execution, and audit

The four principles for a public budget

The principle of annuality, the principle of unity, the principle of universality, and the principle of a balanced budget

Nagwa uses cookies to ensure you get the best experience on our website. Learn more about our Privacy Policy.