Chapter 16 Vocab: Income, Welfare, and Education Policy: Providing for Personal Security Flashcards
Progressive income tax
A tax on personal income in which the tax rate increases as income increases; in other words, the tax rate is higher for higher income levels.
Capital gains tax
The tax that individuals pay on money gained from the sale of a capital asset, such as property or stocks.
Poverty line
As defined by the federal government, the annual cost of a thrifty food budget for an urban family of four, multiplied by three to allow also for the cost of housing, clothes, and other expenses. Families below the poverty line are considered poor and are eligible for certain forms of public assistance.
Public assistance
Social welfare programs funded through general tax revenues and available only to those in financial need. Eligibility for such a program is established by a means test. (See also “means test;” “social insurance.”)
Means test
The requirement that applications for public assistance must demonstrate they are poor in order to be eligible for the assistance. (See also “public assistance.”)
In-kind benefit
A government benefit that is a cash equivalent, such as food stamps or rent vouchers. This form of benefit ensures that recipients will use public assistance in a specified way.
Social insurance
Social welfare programs are based on the “insurance” concept, requiring that individuals pay into the program in order to be eligible to receive funds from it. An example is Social Security for retired people. (See also “public assistance.”)
Entitlement program
An individual benefit program, such as Social Security, that requires government to provide a designated benefit to any person who meets the legally defined criteria for eligibility.
Equality of opportunity
The idea that all individuals should be given an equal chance to succeed on their own.
