ch 1-5 Flashcards
in the form of gov known as __ ,power is divided between central and regional
federalism
a cultural concept related to legal relationships about things that can be possessed
property
taxes are broad/narrow and provide/do not provide a benefit to the payer
broad, do not provide
us tax system uses property value as an indicator of
wealth
vehicle emission tests are an example of what type of policy
public
a tax exemption for pollution control equip is what type of policy
tax
todays property tax is more likely to bw on tangible/intangible property
tangible
share of prop tax as funding source has declined for most state/local
state
us prop tax assessment is more local/state
local
2 types of limits found in prop tax systems are
revenue and assessed value increases
democracies tend to promote capitalist/socialist systems
capitalist
when the gov adjusts interest rates, this is redistribution/stabilization
stabilization
2 causes of market failure
lack of information
limited numbers of buyers and sellers
2 causes of gov failure
special interest groups
bureaucratic costs
3 attributes of a good tax system
fairness
neutrality
uniformity
functions of prop tax system ACC
assessment
collection
control
greater accessibility to non lawyers is a claimed advantage of which legal system
civil
what clause assigns congress the power to regulate foreign and interstate commerce
commerce
the Sioux city bridge co v Dakota county established
uniformity over true values
object is liable
in rem
taxpayer is liable
in personam
annual rent value
expected annual rent that prop can generate
number of gov in us
87,525
if non payers can be excluded, what type of market sector is it?
private
which form of law relies on court decisions
common
which form of law relies on tax codes
civil
which form of law originated in Rome
civil
what part of the us const assigns congress the power to regulate foreign and interstate trade
commerce clause
anything that effects taxes is a
tax policy
an action to stimulate a response, to make things better
public policy
cultural concepts about legal relationships regarding posession
property
impost, poll, and general property taxes are examples of
colonial taxes
determine what commodities are produced and services provided and allocation of resources
economic systems
this economy responds to the forces of supply and demand
market
what economy uses less coercion
market
a good for which nonrival benefits exist and it is difficult or too expensive to exclude nonpayers
public good
the existence of public goods, spillovers, externalities are examples of
market failures
lack of info, special interest groups, bureaucratic costs are examples of
government failures
tax is considered equitable when it pays for services consumers desire
benefit principle
equal treatment of taxpayers who are the same in all relevant economic aspects
horizontal equity
taxpayers who are unequal in economic positions should be treated differently
vertical equity
ability of tax yields to rise
buoyancy
tax systems based more on prop value tend to be more stable and ___ elastic
less
what type of taxation allows for a tax to be assessed against a tenant or renter?
in personam
which form of law provide greater certainty
civil
what is defined as powers constitutionally divided between federal and state govs?
federalism
what has been the largest change in general property tax over the last century?
not taxing intangibles
What is not part of a good tax system? stability cost effectiveness inelastic public acceptance
inelastic
what 2 principles are necessary for a fair and equitable tax system?
benefit, ability to pay
This form of gov derives their power from the national
unitary
this form of federalism is referred to as pyramid
coercive
this form of federalism is referred to as dual
layer
this form of federalism is referred to as cooperative
marble
in the 1930s, delinquent ___ taxes became very common, and many states responded by adopting ___ taxes
property, sales
Sales tax is regressive because
it is a higher % of lower incomes
States attempt to reduce the regressivity of sales tax by allowing exemptions on
food, prescription drugs, and taxing services
Sales tax is usually more popular than income and property because
no complex forms, small increments
State income tax base definitions usually conform closely to
federal income
income tax is tied more to ___ than other taxes
ability to pay
As a % of general revenue, which local gov rely heavily on charges
special districts
a major threat to state sales tax collections comes from
remote purchases by mail or over the internet
2 features of state tax law that can make the income tax progressive are
tax exempt amount of income, graduated rate structure
Taxes levied on a unit basis have revenue problems over time because
revenue does not grow with prices or income like other taxes
General revenue is all government revenue except:
Utility, liquor store and insurance trust revenue.
Inter-governmental revenue is mainly:
Revenue sharing and grants.
Own source is all general revenue except:
Inter governmental revenue.
The principal type of own source of revenue for local governments.
property tax
Comparing state and local government revenue in 1927 to those in 2007, would be misleading without adjusting for:
Price inflation, population growth and economic (income) growth.
When presenting revenue burdens across states, there are two basic conventions for how to present comparable numbers:
Per capita (divided by population) or per $1,000 of personal income.
A method for getting a more standardized measure of tax capacity than personal income.
Representative tax system
A comparison of actual tax collections to tax capacity.
Tax effort
Is on the person statutorily responsible for paying
Legal incidence
Reflects who actually pays the tax.
economic incidence
A short run equilibrium analysis that focuses on the item being taxed.
Partial equilibrium analysis
Tax exemptions that reduce tax collections.
Tax expenditures
Income tax structured so that higher income taxpayers pay higher rates.
vertical equity
The principal under which a tax should not influence economic decisions.
neutrality
Legally, local governments derive their power from the states.
Dillons rule
The main difference between federal vs. state relations and state vs. local relations
There is no constitutional basis for local government power.
An assessment system in which fractional ratios are applied to appraised values.
Classification
A valuation system in which adjustments to market value occur mostly upon the sale of the property.
Acquisition value
The value concept that captures the dynamics of changes in the underlying property wealth.
Current market value
A system in which the property tax rate “floats”.
Budget driven system
The system that tends to generate more property tax revenue when assessed values increase.
Rate driven system
Under assessing residential property even though such under assessment is not permitted by law.
De facto exemption
An example is a $25,000 homestead exemption.
partial exemption
Generally results in more openness in property tax systems.
truth in taxation
A form of economic incentive often used to revitalize depressed areas.
TIF Tax increment financing
Are current market value assessment systems more concerned with the magnitude or distribution of property tax?
distribution
Are property taxes typically more predictable under current market value based systems or acquisition value based systems?
Acquisition value based systems
Are assessed value increases more closely tied to tax and revenue increases in a rate driven system or a budget driven system?
Rate driven systems
A system that requires taxing districts to clearly advertise budget increases, often by direct notification of taxpayers.
Truth in taxation
Two examples of common partial property tax exemptions are:
Homestead and agricultural use value.
The major disadvantage of a fractional assessment (classification) ratio system is:
Less system understandability.
One way to prevent the shift of property taxes to less favored property tax payers without reducing tax district revenue is:
Substitute funding such as; revenue sharing, state aid, user fees, or local non-property taxes.
An example of a mechanism sometimes used to temporarily relieve property tax burden is:
A tax deferral
Which program is the most favorably received by beneficiaries a tax deferral or a circuit breaker?
Circuit breaker
A major advantage of prop tax, especially during economic downturns is
inelasticity
who pays is independent of the legal liability of the tax (T/F?)
true
Tax expenditures are measures of the values of loopholes of a particular tax (T/F?)
True
Allow prices to be set based on supply and demand
market based economic systems
Dominance of Windows operating system
example of market failure
What can be consumed by more than one person, non payers consume, not market determined
public goods
The property tax is at least somewhat pro or regressive
progressive
