The depreciation of capital may or may not mirror the actual capital consumption, since several accounting techniques are available to the firm for tax purposes. Examples of indirect taxes are sales taxes, excise taxes, and tariffs. This portion of NI is unavailable to the factors of production. Retained business earnings . What is retained by businesses is unavailable to the factors of production.
Private transfers are gifts from one individual or institution to another.
When income is transferred, it is not spent. Therefore, it is saved. When the transferred income is received, it may be spent or saved. Government transfers redistribute the national income by taxing some individuals or institutions and subsidizing others. Included in tax collections are Social Security payments into the fund.