Analyze various methods of government financing in their budget, and provide a synthesis of the strengths and weaknesses of these methods, as well as their long term effects.
The first method of government financing is taxation. The strengths of taxation are that it is anti-inflationary, has redistributive power, and can be used to directly finance welfare schemes. The main advantage of taxation is that it can be imposed on those who can afford it.
The disadvantages of taxation are that when there is indirect tax, it is regressive. Taxation is politically unpopular and at higher levels creates a disincentive to work.
The long-term effect of taxation is that funds for ...
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