Chapter 14: Taxes Flashcards
1
Q
Taxes
A
necessity to help a government to survive
2
Q
What are the principals looked upon on taxes?
A
Benefits - received
Ability to pay
3
Q
What are the criteria for taxes
A
Equity, Simplicity, Efficiency
4
Q
What are the types of taxes?
A
Progressive - the wealthier pay a high percentage
Regressive - the poor pay more
Proportional (Flat) - everyone pays the same percent
5
Q
What is the impact of taxes on the economy?
A
Resource Allocation - the assignment of nonbusiness income to a particular state
Productivity & Growth - High taxes reduce incentives to work
Economic Behavior - Tax Incentives
6
Q
How do taxes help?
A
- FICA
- Social Security
- Medicare
- Unemployment taxes
7
Q
Impact of Federal Spending
A
- Resource Allocation
- Income Distribution
- Competition with the private sectors
8
Q
Examples of Local Spendings
A
- Public schools
- Public safety
- Public welfare
- Utilities, transits, sewage system, etc.
