Related Research Articles
In Spain, an autonomous community is the first sub-national level of political and administrative division, created in accordance with the Spanish Constitution of 1978, with the aim of guaranteeing limited autonomy of the nationalities and regions that make up Spain.
In economics and political science, fiscal policy is the use of government revenue collection and expenditure to influence a country's economy. The use of government revenue expenditures to influence macroeconomic variables developed in reaction to the Great Depression of the 1930s, when the previous laissez-faire approach to economic management became unworkable. Fiscal policy is based on the theories of the British economist John Maynard Keynes, whose Keynesian economics theorised that government changes in the levels of taxation and government spending influence aggregate demand and the level of economic activity. Fiscal and monetary policy are the key strategies used by a country's government and central bank to advance its economic objectives. The combination of these policies enables these authorities to target inflation and to increase employment. In modern economies, inflation is conventionally considered "healthy" in the range of 2%–3%. Additionally, it is designed to try to keep GDP growth at 2%–3% percent and the unemployment rate near the natural unemployment rate of 4%–5%. This implies that fiscal policy is used to stabilise the economy over the course of the business cycle.
Public finance is the study of the role of the government in the economy. It is the branch of economics that assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones. The purview of public finance is considered to be threefold, consisting of governmental effects on:
- The efficient allocation of available resources;
- The distribution of income among citizens; and
- The stability of the economy.
Equalization payments are cash payments made in some federal systems of government from the federal government to subnational governments with the objective of offsetting differences in available revenue or in the cost of providing services. Many federations use fiscal equalisation to reduce the inequalities in the fiscal capacities of sub-national governments arising from the differences in their geography, demography, natural endowments and economies. The level of equalisation sought can vary, however.
In macroeconomics and finance, a transfer payment is a redistribution of income and wealth by means of the government making a payment, without goods or services being received in return. These payments are considered to be non-exhaustive because they do not directly absorb resources or create output. Examples of transfer payments include welfare, financial aid, social security, and government subsidies for certain businesses.
As a subfield of public economics, fiscal federalism is concerned with "understanding which functions and instruments are best centralized and which are best placed in the sphere of decentralized levels of government". In other words, it is the study of how competencies and fiscal instruments are allocated across different (vertical) layers of the administration. An important part of its subject matter is the system of transfer payments or grants by which a central government shares its revenues with lower levels of government.
Federalism was adopted, as a constitutional principle, in Australia on 1 January 1901 – the date upon which the six self-governing Australian Colonies of New South Wales, Queensland, South Australia, Tasmania, Victoria, and Western Australia federated, formally constituting the Commonwealth of Australia. It remains a federation of those six original States under the Constitution of Australia.
The National Finance Commission Award or NFC is a series of planned economic programs in Pakistan enacted since 1951. Constituted under the Article 160 of the Constitution, the program was emerged to take control of financial imbalances and equally managed the financial resources to four provinces to meet their expenditure liabilities while alleviating the horizontal fiscal imbalances. As per Constitution, the program awards the designs of financial formulas of economic distribution to provincial and federal government for five consecutive years. All together, a total of seven awards has been reimbursed since its emergence in 1951, by Prime Minister Liaquat Ali Khan. Stipulations and directions mentioned by the Constitution, the provisional governments and federal government competes to get higher share of the program's revenues in order to stabilize their own financial status.
Tax harmonization is generally understood as a process of adjusting tax systems of different jurisdictions in the pursuit of a common policy objective. Tax harmonization involves the removal of tax distortions affecting commodity and factor movements in order to bring about a more efficient allocation of resources within an integrated market. Tax harmonization may serve alternative goals, such as equity or stabilization. It also can be subsumed, along with public expenditure harmonization, under the broader concept of fiscal harmonization. Narrowly defined, tax harmonization guided by this policy goal implies — under simplifying assumptions about other policy instruments and economic structure — convergence toward a more uniform effective tax burden on commodities or on factors of production. Convergence may be attained through the alignment of one or several elements that enter the determination of effective tax rates: the statutory tax rate and tax base, and enforcement practices. Perhaps the most widely accepted argument for harmonization involves convergence in the definition of product value or income for tax purposes. Such tax base harmonization would contribute to transparency for economic decision-making and, thus, to improved efficiency in resource allocation. In particular, a common income tax base for multinational companies operating in different jurisdictions would be instrumental not only in enhancing efficiency, but also in preventing overlaps or gaps in tax claims by different countries. Tax harmonization is an important part of the fiscal integration process. Fiscal integration is the process by which a group of countries agree on taking measures that lead to a higher level of fiscal convergence, the ultimate goal being the formation of a fiscal union. Tax harmonization doesn't automatically lead to the formation of a fiscal union, the second part involving much larger scale project that includes fiscal transfers, a fully harmonized legislation and maybe some supervising institutions, beside a long-run agreement. Starting from the definition given to the fiscal integration process, we can easily say that tax harmonization is the process by which a heterogeneous group of countries, federal states or even local governments agree on setting a minimum and maximum level of their tax rates, including also a higher degree of harmonization of tax legislation, in order to attract foreign investors and to encourage local development and investments.
The Canada Health Transfer (CHT) is the Canadian government's transfer payment program in support of the health systems of the provinces and territories of Canada. The program was originally combined with the Canada Social Transfer in a program known as the Canada Health and Social Transfer. It was made independent from the Canada Health and Social Transfer program on April 1, 2004 to allow for greater accountability and transparency for federal health funding led by then prime minister Paul Martin.
Full fiscal autonomy (FFA) – also known as devolution max, devo-max, or fiscal federalism – is a particular form of far-reaching devolution proposed for Scotland and for Wales. The term has come to describe a constitutional arrangement in which instead of receiving a block grant from the UK Exchequer as at present, the Scottish Parliament or the Senedd would receive all taxation levied in Scotland or Wales; it would be responsible for most spending in Scotland or Wales but make payments to the UK government to cover Scotland or Wales's share of the cost of providing certain UK-wide services, largely defence and foreign relations. Scottish/Welsh fiscal autonomy – stopping short of full political independence – is usually promoted by advocates of a federal United Kingdom.
Public economics(or economics of the public sector) is the study of government policy through the lens of economic efficiency and equity. Public economics builds on the theory of welfare economics and is ultimately used as a tool to improve social welfare. Welfare can be defined in terms of well-being, prosperity, and overall state of being.
Transfer payments are a collection of payments made by the Government of Canada to Canadian provinces and territories under the Federal–Provincial Arrangements Act. Chief among these are the Canada Social Transfer, the Canada Health Transfer and equalization payments. The last of these can be spent however the receiving provinces see fit, while the first two are intended to support social and health services respectively.
Paul Bernd Spahn is emeritus professor of public finance at the Goethe University Frankfurt.
The fiscal imbalance in Australia is the disparity between the revenue generation ability of the three levels of governments in Australia relative to their spending obligations; but in Australia the term is commonly used to refer more specifically to the vertical fiscal imbalance, the discrepancy between the federal government's extensive capacity to raise revenue and the responsibility of the States to provide most public services, such as physical infrastructure, health care, education etc., despite having only limited capacity to raise their own revenue. In Australia, vertical fiscal imbalance is addressed by the transfer of funds as grants from the federal government to the states and territories.
The Forum of Federations is an international organization based in Ottawa, Ontario, Canada. It develops and shares comparative expertise on the practice of federal and decentralized governance through a global network. The Forum and its partners comprise a global network on federalism.
In Canada, the federal government makes equalization payments to provincial governments of lesser fiscal capacity so that "reasonably comparable" levels of public services can be provided at similar levels of taxation. Equalization payments are entrenched in the Constitution Act of 1982, subsection 36(2).
The Mowat Centre was an independent Canadian public policy think tank associated with the Munk School of Global Affairs and Public Policy at the University of Toronto. It was established in 2009 with support from the government of Ontario, and published its first report in February 2010. It closed in June 2019 after its funding agreement with the Government of Ontario was cancelled. It was named after Ontario's longest-serving Premier, Sir Oliver Mowat.
Katherine Cuff is a Canadian economist who currently serves as Professor of Economics at McMaster University. She holds the Canada Research Chair in Public Economic Theory and has been recognized as a McMaster University Scholar. Cuff also serves as Managing Editor of the Canadian Journal of Economics and editor of the FinanzArchiv.
The Chinese government initiated a fiscal and taxation system reform in 1992, prepared and promulgated in 1993, and finally implemented in 1994. The reform was a large-scale adjustment of the tax distribution system and tax structure between the central and local governments, which was regarded as a milestone in the transition of China's fiscal system from planned economy to market economy. The main purpose of the tax-sharing reform is to alleviate the budget deficit since the end of the 1980s. As the reform achieved indeed remarkable results, it yet evoked problems like heavier financial burden of local governments. In order to make ends meet, governments started to let lands which eventually pushed up the land and housing price. Therefore, the tax-sharing reform is considered to be the reason of China's severe land finance.
References
- ↑ Boadway, R. (2000). "Recent Developments in the Economics of Federalism" . In Lazar, Harvey (ed.). Canada: The State of the Federation 1999–2000: Toward a New Mission Statement for Canadian Fiscal Federalism. Kingston: Institute of Intergovernmental Relations. pp. 41–78. ISBN 978-0-88911-843-0.
- ↑ Breton, A. (1998). Competitive Governments: An Economic Theory of Politics and Public Finance. New York: Cambridge University Press. ISBN 9780521646284.