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ON THE TREATMENT OF TAXES AND GOVERNMENT IN THE NATIONAL ACCOUNTS
Author(s) -
Bournay Jacques
Publication year - 2007
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.2007.00253.x
Subject(s) - national income and product accounts , national accounts , economics , subsidy , government (linguistics) , context (archaeology) , consumption (sociology) , measures of national income and output , public economics , value (mathematics) , macroeconomics , market economy , paleontology , social science , linguistics , philosophy , machine learning , sociology , biology , computer science
Framed in the context of the ongoing revision of the 1993 System of National Accounts (SNA), this note proposes a new presentation of the National Accounts. While it does not require new information, nor difficult calculations, it is suggested to be conceptually clearer and practically simpler. The changes concern the treatment of taxes and government in the national accounts which imply that: (i) GDP, measured at basic price, is now exactly the sum of all value added, which is split in the compensation of employees and an enlarged operating surplus; (ii) the two functions of government are clearly distinguished in a modified sequence of accounts, that is, as producing non‐market services up to the allocation of primary income account, and then as redistributing the national income; and (iii) with a conventional allocation of government services and GDP broken down between market GDP and non‐market GDP, households remain the only final consumer and the so called question of consumption subsidies is resolved.