Ch.23 - Government Spending, Taxes, and Fiscal Policy Flashcards
What is social insurance?
Government-provided insurance against bad outcomes such as unemployment, illness, disability, or outliving your savings
What are income taxes?
Taxes collected on all income, regardless of its source
What are payroll taxes?
Taxes on earned income
What is earned income?
Wages from an employer, or net-earnings from self-employment
What is a progressive-tax?
A tax where those with more income tend to pay a higher share of their income in taxes
What is taxable income?
The amount of your income that you pay taxes on
What is a marginal tax rate?
The tax rate you pay if you earn another dollar
What is a sales tax?
A tax on purchases that’s typically a percentage of the purchase price of goods & services
What is an excise tax?
A tax on a specific product
What is a property tax?
A tax on the value of property, usually real estate
What is a regressive tax?
A tax where those with less income tend to pay a higher share of their income on the tax
What are tax expenditures?
Special deductions, exemptions, or credits that lower your tax obligations to encourage you to engage in certain kinds of actions
What is fiscal policy?
The government’s use of spending and tax policies to attempt to stabilize the economy
What is discretionary fiscal policy?
Policy that temporarily changes government spending or taxes to boost or slow the economy
What is an automatic stabilizer?
Spending and tax programs that adjust as the economy expands and contracts, without policy makers taking any deliberate action
What is a budget deficit? What is a budget surplus?
The difference between spending and revenue in a year in which:
Deficit: Spending > Revenue
Surplus: Revenue > Spending
