Chapter 10 Flashcards
what are taxes?
they are required payments to the government
list the three things taxes can do
- raising revenue
- discouraging undesirable
- encouraging desirable activity
what is a sin tax?
a sin tax discourages undesired behavior such as tobacco or gas.
what is the value of the activities or assets subject to the tax?
tax base
what is the form you will complete and submit to the government when you pay your income taxes. It contains the information used to determine the amounts of taxes you owe?
a tax return
what are the three different types of taxes found on a paystub?
- federal income
- social security
- medicare
NOT STATE INCOME TAX
what is a tax on corporate profit that is paid directly by the corporation?
corporate tax
what is the required payment made by the owners of the property, such as land, buildings, boats, and cars?
property tax
what is collected from consumers by firms when a taxed good or service is purchased. the tax is then passed onto the government
a sales tax
what does the IRS stand for?
Internal Revenue Service
what is when those who have a higher ability to pay taxes make a higher tax payment?
vertical equity
what is the tax that people with a higher income pay a higher share of their income taxes?
progressive tax
what is the tax that if people with a higher income pay a lower share of their income in taxes?
regressive tax
what is the tax that if everyone pays that same share of their income in taxes, regardless of their level of income
proportional or flat tax
what does it mean when that those with the same ability to pay taxes make the same tax payment
horizontal equity
