Question

FINANCING PUBLIC SERVICES

One Lesson: In one paragraph, What did you learn about financing public services? Identify and discuss one lesson you learned that might be helpful to you now or in your future public-sector career?

Answer 1

There are various ways in which the government can raise finances. The main sources of public finance are taxes. Tax has been a central part of public finance since a long time and are basically divided into direct and indirect taxes. Individuals and entities are taxed in different ways such as property tax, income tax, excise duty, etc.Besides taxes public entities take loans and issue bonds for financing their activities. The main lesson here is that the manner in which the public finance is raised has an important impact on distribution of income and on market efficiency. There is a major impact of the various types of taxes and the types of borrowings that the public sector is engaged in. Even a small change in any of these factors can have a multiplicative effect upon the economy and so every decision of Financing has to be taken very strategically and after a lot of research.