Transfer Payments

December 21, 2017


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In 2007-2008. 84% of revenues in the public sector accounted for taxes. This includes contributions to social insurance and local taxes. This is understandable since both – mandatory payments. Contributions to the fund of social insurance must be made by employers, salaried staff and people engaged in a personal difficulty. Local taxes – taxes on property owners. As the name implies this type of expenditure, they represent a transfer of money in the form of subsidies (grants) to individual families and businesses.

These costs do not mean the payment for goods or work done, and the issue of unemployment benefits, payments to mothers on children, as well as investment subsidies. Although transfer payments are government spending, a real waste of money made by those families and businesses that receive these funds. Transfer payments account for about half of all government spending. Public sector expenditure account for a large percentage of the total cost of the country in the field of economics. This means that any changes in public spending seriously affect both the demand for goods and services, and at the level of employment.

Therefore, the state can arbitrarily change the amount of its expenditures to increase or decrease the overall demand for goods and services. This theme is revealed in Section 17.4, which deals with the budget. The most striking example of this category of tax can serve as a personal income tax. Such taxes are called direct because the tax burden falls squarely on him who pays.