Chapter 7 - Taxes Flashcards
Incidence (of tax)
measure of who really pays for a tax
Tax Rate
amount of tax ppl are required to pay per unit of whatever is being taxed
Administrative Costs
resources used for a taxes collection, for the method of payment, and for any attempts to evade the tax
-most familiar costs are the time spent filling out income tax forms and the money for tax services like H and R block
Benefits Principle
those who benefit from public spending should bear the burden of the tax that pays for that spending
Ability-to-pay Principle
those with greater ability to pay a tax should pay more tax
Lump-Sum Tax
same for everyone, regardless of any actions ppl take
Tax Base
measure of value that determines how much tax an individual/firm pays
Tax Structure
specifies how tax depends on the base, usually as a percentage
Income Tax
tax on an individual/family’s income
Payroll Tax
tax on the earnings en employer pays to an employee
Sales Tax
tax on value of goods sold
Profits Tax
tax on a firm’s profits
Property Tax
tax on the value of property, such as the value of a home
Wealth Tax
tax on an individual’s wealth
Proportional Tax
same percentage of the tax base regardless of taxpayer’s income or wealth
