What is the difference between revenue expenditure and capital expenditure? Explain how taxes and government expenditure can be used to influence distribution of income in the society.
CBSE OUTSIDE DELHI - SET 1 2016
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Revenue expenditure: Is expenditure that neigther creates any assets nor reduces any liability while capital expenditure eighther creates assets or reduces liabilities.
Taxes and expenditure: Can be used to alter distribution of income. Government can impose higher taxes on incomes of the rich and goods and services consumed by them. The money so collected can be spent on providing free goods and services to the poorer section of the society. This will reduce disposable income of the rich and rise that of the poor. This can alter distribution of income.
Taxes and expenditure: Can be used to alter distribution of income. Government can impose higher taxes on incomes of the rich and goods and services consumed by them. The money so collected can be spent on providing free goods and services to the poorer section of the society. This will reduce disposable income of the rich and rise that of the poor. This can alter distribution of income.
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