EC140 Lecture : 29. Fiscal.docx

• School: WLU
• Department: Economics
• Course: EC140
• Professor: Rizwan Tahir

Document Summary

Fiscal policy: the use of the federal budget to achieve macroeconomic objectives, such as full employment, sustained economic growth, and price level stability. Federal government outlays and revenues and total government outlays and revenues fluctuate similarly, but total > federal so total outlays fluctuate more. Provincial outlays/revenues vary a great deal across provinces. Federal government and parliament make fiscal policy. After a process of consultations, the minister of finance presents a budget plan to parliament . Parliament debates the plan and enacts the laws necessary to implement it. Personal income taxes are the largest revenue source. Mildly progressive in canada, as those with high income pay larger proportion than those with low income increasing marginal tax rate as income increases, move to higher tax bracket. Payroll taxes are regressive: those with high income pay a smaller proportion of income as tax than those with low income due to caps on insurable/pensionable earnings.