FINANCIAL POLICY THEORIES

FUNGSI APBN a statement containing a forecast of revenues and expenditures for a period of time MOBILISASI DANA INVESTASI STABILISASI EKONOMI MENINGKATKAN PERTUMBUHAN EKONOMI

PRINSIP KEUANGAN NEGARA PENGELUARAN ADALAH FUNGSI DARI DISTRIBUSI KEMAKMURAN MAYORITAS PROGRAM PENGELUARAN DITUJUKAN UNTUK SEKELOMPOK ORANG PENGELUARAN DIBIAYAI OLEH PENDAPATAN NEGARA PENDAPATAN TERBESAR BERASAL DARI PAJAK. PENGELUARAN NEGARA: PEMERATAAN PENERIMAAN PAJAK

PRINSIP KEUANGAN NEGARA HORIZONTAL EQUITY: DISTRIBUSI PAJAK SAMA ANTAR DAERAH YANG PUNYA SITUASI YANG SAMA ABILITY TO-PAY PRINCIPLE: INCOME AND WEALTH OF INDIVIDUAL BENEFITS PRINCIPLE: TAX PAYMENT RESULT IN (PUBLIC SERVICES) BENEFITS RECEIVED

DISTRIBUSI PENDAPATAN DAN KEMAKMURAN REASONS: ROLE OF GOVERNMENT: CLOSING GAP BEWEEEN RICH AND POOR PRODUCERS WILL GET MORE COSTUMERS; EXISTING ABILITY TO PAY MARKET WILL WORK EFFICIENTLY: COST OF PAYING TAX EQUALIZATION OF ENDOWMENTS AND CAPACITIES EQUALIZATION OF ACCESS TO OPPORTUNITIES

REDISTRIBUSI PENDAPATAN DAN KEMAKMURAN NOT PURE COLLECTIVE GOODS: DEPEND ON THE PRIORITY OF GOVERNMENT SECTOR (BUDGET) EX: CCTV PURE COLLECTIVE GOODS: MANDATORY WILLINGNESS OF PEOPLE TO SHARE TAX PAID IS GREATER CAUSE IT WILL INCREASE OTHER WELLBEING EX: ALLEVIATE POVERTY SOCIAL CONTRACT: SOCIAL JUSTICE EX: HEALTH INSURANCE

REDISTRIBUSI PENDAPATAN DAN KEMAKMURAN Non-ideal political process Means to equalizing in earning income and accumulating wealth opportunities: training for work-finder (vocational schools, polytechnic) Non-fiscal means: minimum wage laws NOT RESTRICTED TO EQUALLY MEASURED BENEFICIARIES

ASPECT IN FINANCING GOVERNMENT EXPENDITURES REVENUES TAXES NON-TAXES INCOME LEVIES LOANS GRANTS MEANS TRANSFER OF MONEY INTERGOVERNMENTAL FISCAL RELATIONSHIP

PRINSIP PENGENAAN PAJAK RESTRICTED TO MEASURED EQUAL IMPOSITION GEOMETRIC ANALYSIS: AGGREGATE MARGINAL CONDITION (SEE FIGURE ON PAGE 76) WICKSELL’S PRINCIPLE OF TAXATION AGGREGATE = QUALIFIED MAJORITY (1/5 OF TOTAL MEMBER)

PRINSIP PENGENAAN PAJAK SECOND ORDER EFFICIENCY LEAST-PRICE DISTORTION: MINIMIZE WELFARE LOSS EQUAL IMPOSITION AND DISTRIBUTION OF TAXES PROPORTION TO INCOME AND WEALTH GENERAL SALES TAX

DEBT POLITICAL MOTIVATION: GAIN TRUST FROM OTHER COUNTRIES ECONOMIC MOTIVATION: NOT TO REDUCE THE PRIVATE WEALTH IN A COUNTRY TYPES: 1.GOVERNMENT BONDS 2.INTERNATIONAL LOAN 3.DOMESTIC LOAN

DEBT PROBLEMS: 1.CITIZENS PAY TWICE: LOAN AND INTEREST 2.CITIZEN IN THE TIME OF LOAN DUE DATE BEAR THE BURDEN BUT RECEIVE NO BENEFITS 3.COST OPPORTUNITY LOST FROM DICTATION OF USE OF LOAN 4.NO DOMESTIC BENEFITS RECEIVED IN CASE OF EXTERNAL LOAN, PAYMENT ARE MADE TO FOREIGN CITIZENS 5.OPPORTUNITY OF FAKE BENEFITS RESULTING FROM CAPITAL PROJECTS TO CITIZENS

DEBT:WHEN SHOULD BORROW? HIGH UNEMPLOYMENT HIGH BUDGET DEFICIT FINANCING CAPITAL PROJECTS (CERTAIN BENEFITS OVER LONG PERIODS OF TIME)

DEBT:WHEN SHOULD BE RETIRED? BUDGET SURPLUS