| A | B |
|---|
| Current expenditure | The day-to-day cost of running the public sector e.g. public sector workers pay building running costs. |
| Capital expenditure | Public sector investment in items such as new schools hospitals roads. |
| Transfer payments | Money given to people who are not productive in the economic sense e.g. unemployment benefit. |
| Public goods | Goods provided by the government and not by firms. |
| Merit goods | Goods that the government feel that everybody should have whether or not they can afford them e.g. education. |
| Welfare state | A common name for the provision of merit goods by the government. |
| Income tax | A tax taken from salaries and wages. |
| National debt | The total stock of past and present public sector borrowing. |
| Inheritance tax | A tax made on wealth at the time of a death. |
| Budget deficit | If the government spends more than its tax revenue the budget is said to be in this state. |
| Corporation tax | A tax on company profits. |
| Value Added Tax (VAT) | A tax added on to the price of many goods and services. |
| The Budget | An estimate of government spending and revenue |
| Progressive tax | A tax which takes a greater proportion of a high income than a low income. |
| Regressive tax | A tax which falls as a proportion of income as income rises is said to be this. |
| Capital gains tax | This tax is imposed on profits made by people selling shares property etc. for a higher price than they paid for them. |
| Tariffs | Tax imposed on imported goods from outside of the EU. |
| Excise duty | A tax placed on specific goods |
| Tax evasion | Illegal non-payment of taxes. |
| Direct taxation | A tax collected from income and wealth. |
| Indirect taxes | These are taxes on spending. |
| Local authority | Another name for local government or local councils. |
