Application 10B - D pg. 55 - 61 Flashcards
Define direct taxes
direct taxes - taxes paid directly to the government
>examples: income tax and property tax
Define indirect tax
indirect tax - tax for which the responsibility for payment can be passed along to someone else
>example: sales tax
Define progressive tax system
progressive tax system - system in which the wealthy pay taxes at a higher tax rate than lower income people
Define proportional or flat tax
proportion or flat tax system - system in which everyone pays the same percentage of taxes, regardless of income earned
Define regressive tax
regressive tax system - system in which people with less income pay the highest percentage of taxes, while the rich pay a smaller percentage but an equal amount of tax
Define income taxes
income taxes - a certain percentage of all income paid in taxes to federal government
Define Federal Insurance Contribution Act (FICA) tax
Federal Insurance Contribution Act (FICA) tax - tax used to fund both Social Security and Medicare programs (usually shown as two separate deductions on a pay stub)
Define medicare
medicare - federal health insurance program designed to help people with their medical expenses if they are 65 or older
Define property tax
property tax - tax that all property owners pay annually on assessed value of their property
Define sales tax
sales tax - set percentage of every sale of any product or service must be paid to state
*Local governments may add an additional percentage for sales in their country or city to find local government projects
Define hotel tax
hotel tax - every night someone stays in a hotel, the occupant pays an additional percentage in addition to regular sales tax
Define deficit spending
deficit spending - spending more money each year than is brought in through revenue
Define national debt
national debt - total amount owed by a national government
