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Econ Chapter 14/15 > Chapter 14 Terms > Flashcards

Chapter 14 Terms Flashcards

1
Q

Sin Tax

A

Relatively high tax designed to raise revenue while reducing consumption of a socially undesirable product

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2
Q

Distribution of Income

A

Way in which income is allocated among families, individuals, or other groups

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3
Q

Validity

A

Justification

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4
Q

Incidence of a tax

A

Final burden if a tax

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5
Q

Tax Loopholes

A

Exceptions or oversights in the tax law allowing taxpayer to avoid taxes

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6
Q

Sales Tax

A

General state or city tax levied on a product at the time of sale

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7
Q

Individual Income Tax

A

Tax levied on the wages, salaries, and other income of individuals

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8
Q

Internal Revenue Service (IRS)

A

Branch of the US treasury department that collects taxes

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9
Q

Tax Return

A

Annual report filed with local, state, or federal government detailing Income earned and taxes owed

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10
Q

Ability-to-pay

A

Principle of taxation based on belief that taxes should be paid according to level of income regardless of benefits received

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11
Q

Proportional Tax

A

(Or flat) tax in which percentage of income paid in tax is the same regardless of the level of income

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12
Q

Average Tax Rate

A

Total taxes paid divided by total taxable income

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13
Q

Medicare

A

Federal healthcare program for senior citizens regardless of income

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14
Q

Progressive Tax

A

Percent of income taxes rises as level of income rises

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15
Q

Regressive Tax

A

Percentage of income taxed goes down as income goes up

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16
Q

Value-added tax (VAT)

A

Tax on the value added at every stage of the production process

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17
Q

Flat tax

A

Proportional tax on individuals income after a specific threshold has been reached

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18
Q

Alternative Minimum Tax

A

Personal income tax rate that applies to cases where taxes would otherwise fall below a certain level

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19
Q

Capital Gains

A

Profits from the sale of an asset held for 12 months or longer

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20
Q

Fiscal

A

12-month financial planning period

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21
Q

Coincide

A

Happen or exist at the the same time

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22
Q

Appropriation Bill

A

Legislation authorizing spending for certain purposes

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23
Q

Continuing Budget Resolution

A

An agreement to fund a government agency at certain levels

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24
Q

Budget Deficit

A

Negative balance after expenses are subtracted from revenue

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25
Q

Budget Surplus

A

Positive balances after expenses are subtracted from revenues

26
Q

Payroll Withholding System

A

Method of automatically removing deductions from a paycheck

27
Q

Indexing

A

Adjusting of tax brackets to offset the effects of inflation

28
Q

Payroll Tax

A

Tax on wages and salaries to finance social securities and medical costs

29
Q

FICA

A

Federal insurance contribution act: tax levied on employers and employees to support social security and Medicare

30
Q

Corporate Income Tax

A

Tax on corporate profits

31
Q

Excise Tax

A

General revenue tax levied on the manufacture or sale of selected items

32
Q

Estate tax

A

Tax on the transfer of property when a person dies

33
Q

Gift Tax

A

Tax on donations of money or wealth that is paid by the donor

34
Q

Customs Duty

A

Tax on imported products

35
Q

User Fee

A

Fee paid for the use of a food or service

36
Q

Public sector

A

That part of the economy made up of the local state and federal governments

37
Q

Earmarks, or pork

A

A line item budget expenditure that circumvents normal budget building processes and procedures and benefits a small number of people or businesses

38
Q

Mandatory spending

A

Federal spending authorized by the law that continues without the need for annual approvals of congress

39
Q

Discretionary spending

A

Spending for federal programs that must receive annual authorization

40
Q

Transfer Payments

A

Payments fir which the government receives neither goods nor services in return

41
Q

Medicaid

A

Joint federal-state medical insurance program for low income people

42
Q

Deficit Spending

A

Annual government spending in excess of taxes and other revenues

43
Q

National debt

A

Total amount borrowed from investors to finance the governments deficit spending

44
Q

Balanced Budget

A

Annual budget in which expenditures equal revenues

45
Q

Trust Funds

A

Special accounts used to hold revenues designated for a specific expenditure such as social security Medicare or highways

46
Q

Per capita

A

Per person

47
Q

Private sector

A

That part of the economy made up of private individuals and businesses

48
Q

Crowding-out-effect

A

Higher than normal interest rates and diminishing access to financial capital faced by private investors when government increases its borrowing in financial markets

49
Q

Pay as you go provision

A

Requirement that new spending proposals or tax cuts must be offset by reductions elsewhere

50
Q

Line item veto

A

Power to cancel specific budget items without rejecting the entire budget

51
Q

Spending cap

A

Limits on annual discretionary spending

52
Q

Entitlements

A

Program or benefit using established eligibility requirements to provide health nutritional or income supplements to individuals

53
Q

Sequester

A

Law that requires automatic budget cuts

54
Q

Debt ceiling

A

Total amount of money the federal government is allowed to borrow

55
Q

Intergovernmental revenue

A

Funds that one level of the government receives from another level

56
Q

Balanced budget amendment

A

Constitutional amendment requiring government to spend no more than it collects in taxes and other revenues, excluding borrowing

57
Q

Intergovernmental expenditures

A

Funds one level of the government transfers to another level for spending

58
Q

Property tax

A

Tax on tangible and intangible possessions such as real estate buildings furniture stocks bonds and bank accounts

59
Q

Tax assessor

A

Person who examines and values properly for tax purposes

60
Q

Natural monopolies

A

Market structure in which average costs of production are lowest when all output is produced by a single firm

Econ Chapter 14/15 (2 decks)

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