Chapter 20 - Taxation Flashcards
deadweight loss
a loss of total surplus that occurs because the quantity of a good that is bought and sold is below the market equilibrium quantity
lump-sum tax (head tax)
a tax that charges the same amount to each taxpayer, regardless of their economic behavior or circumstances
administrative burden
the logistical cost associated with implementing a tax
incidence
a description of who bears the burden of a tax
proportional/flat tax
a tax that takes the same percentage of income from all taxpayers
progressive tax
a tax that charges low-income people a smaller percentage of their income than high-income people
regressive tax
a tax that charges low-income people a larger percentage of their income than it charges high-income people
income tax
a tax charged on the earnings of individuals and corporations
marginal tax rate
the tax rate charged on the last dollar a taxpayer earns
capital gains tax
a tax on income earned by buying investments and selling them at higher prices
payroll tax
a tax on wages paid to employees
sales tax
a tax that is charged on the value of a good or service being purchased
excise tax
a sales tax on a specific good or service
property tax
a tax on the estimated value of a home or other property
discretionary spending
public expenditures that have to be approved each year
