Government revenue

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Government revenue is the money received by a government from taxes and non-tax sources to enable it to undertake government expenditures.

A government is the system or group of people governing an organized community, often a state.

Tax revenue income gained by governments through taxation

Tax revenue is the income that is gained by governments through taxation. Taxation is the primary source of income for a state. Revenue may be extracted from sources such as individuals, public enterprises, trade, royalties on natural resources and/or foreign aid. An inefficient collection of taxes is greater in countries characterized by poverty, a large agricultural sector and large amounts of foreign aid.

Non-tax revenue

Non-tax revenue or non-tax receipts are government revenue not generated from taxes.

Contents

Government revenue as well as government spending are components of the government budget and important tools of the government's fiscal policy.

Government spending Government consumption, investment, and transfer payments

Government spending or expenditure includes all government consumption, investment, and transfer payments. In national income accounting the acquisition by governments of goods and services for current use, to directly satisfy the individual or collective needs of the community, is classed as government final consumption expenditure. Government acquisition of goods and services intended to create future benefits, such as infrastructure investment or research spending, is classed as government investment. These two types of government spending, on final consumption and on gross capital formation, together constitute one of the major components of gross domestic product.

Government budget government document presenting the governments proposed revenues and spending for a fiscal year

A government budget is a document prepared by the government or other political entity presenting its anticipated revenues and proposed spending for the coming financial year. In most parliamentary systems, the budget is presented to the lower house of the legislature and often requires approval of the legislature. The budget in itself does not appropriate funds for government programs, which requires additional legislative measures.

Fiscal policy use of government revenue collection and spending to influence the economy

In economics and political science, fiscal policy is the use of government revenue collection and expenditure (spending) to influence a country's economy. The use of government revenues and expenditures to influence macroeconomic variables developed as a result of the Great Depression, when the previous laissez-faire approach to economic management became discredited. Fiscal policy is based on the theories of the British economist John Maynard Keynes, whose Keynesian economics indicated that government changes in the levels of taxation and government spending influences 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 the inflation and to increase employment. Additionally, it is designed to try to keep GDP growth at 2%–3% and the unemployment rate near the natural unemployment rate of 4%–5%. This implies that fiscal policy is used to stabilize the economy over the course of the business cycle.

Seignorage is one of the ways a government can increase revenue, by deflating the value of its currency in exchange for surplus revenue, by saving money this way governments can increase the price of goods too far.

Sources

Government revenue is derived from:

Central bank public institution that manages a states currency, money supply, and interest rates

A central bank, reserve bank, or monetary authority is an institution that manages the currency, money supply, and interest rates of a state or formal monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base in the state, and also generally controls the printing/coining of the national currency, which serves as the state's legal tender. A central bank also acts as a lender of last resort to the banking sector during times of financial crisis. Most central banks also have supervisory and regulatory powers to ensure the solvency of member institutions, to prevent bank runs, and to discourage reckless or fraudulent behavior by member banks.

See also

Notes

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    Income is the consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms.

    Revenue income that a business has from its normal business activities

    In accounting, revenue is the income that a business has from its normal business activities, usually from the sale of goods and services to customers. Revenue is also referred to as sales or turnover. Some companies receive revenue from interest, royalties, or other fees. Revenue may refer to business income in general, or it may refer to the amount, in a monetary unit, earned during a period of time, as in "Last year, Company X had revenue of $42 million". Profits or net income generally imply total revenue minus total expenses in a given period. In accounting, in the balance statement it is a subsection of the Equity section and revenue increases equity, it is often referred to as the "top line" due to its position on the income statement at the very top. This is to be contrasted with the "bottom line" which denotes net income.

    Deficit spending Spending in excess of revenue

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    Public finance study of the role of the government in the economy; branch of economics

    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.

    Government budget balance Difference between revenues and spending

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    Taxpayer person or organization subject to a tax on income

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    Taxation in the United Kingdom income tax

    Taxation in the United Kingdom may involve payments to at least three different levels of government: central government, devolved governments and local government. Central government revenues come primarily from income tax, National Insurance contributions, value added tax, corporation tax and fuel duty. Local government revenues come primarily from grants from central government funds, business rates in England, Council Tax and increasingly from fees and charges such as those for on-street parking. In the fiscal year 2014–15, total government revenue was forecast to be £648 billion, or 37.7 per cent of GDP, with net taxes and National Insurance contributions standing at £606 billion.

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    Value-added tax in the United Kingdom

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    In Malaysia, federal budgets are presented annually by the Government of Malaysia to identify proposed government revenues and spending and forecast economic conditions for the upcoming year, and its fiscal policy for the forward years. The federal budget includes the government's estimates of revenue and spending and may outline new policy initiatives. Federal budgets are usually released in October, before the start of the fiscal year. All of the Malaysian states also present budgets. Since state finances are dependent on money from the federal government, these budgets are usually released after the federal one.

    This glossary of economics is a list of definitions of terms and concepts used in economics, its sub-disciplines, and related fields.

    References

    <i>Encyclopædia Britannica</i> Eleventh Edition 1910 Encyclopedia

    The Encyclopædia Britannica, Eleventh Edition (1910–11), is a 29-volume reference work, an edition of the Encyclopædia Britannica. It was developed during the encyclopaedia's transition from a British to an American publication. Some of its articles were written by the best-known scholars of the time. This edition of the encyclopaedia, containing 40,000 entries, is now in the public domain, and many of its articles have been used as a basis for articles in Wikipedia. However, the outdated nature of some of its content makes its use as a source for modern scholarship problematic. Some articles have special value and interest to modern scholars as cultural artifacts of the 19th and early 20th centuries.