Econ 4/13/16 Flashcards
A mandatory payment to a local, state , or national government.
Tax
Government income from taxes and nontax sources.
Revenue
Holds people who benefit directly from public goods should pay for them in proportion to the amount of benefits received.
Benefits-received Principle of Taxation
Holds that people should be taxed on their ability to pay, no matter the level of benefits they receive
Ability-to-pay Principle of Taxation
Tax systems must meet 3 criteria?
Equity, Simplicity, and Efficiency
Fairness of a tax is established by how uniformly the tax is applied.
Equity
A form of wealth-such as income, property, goods , or services - that is subject to taxes.
Tax Base
Based on the value of goods or services at the time of sale.
Sales tax
Based on the value on the value of an individual’s or business’s assets
Property tax
Takes the same percentage of income from all taxpayers
Proportional tax
Places a higher percentage rate of taxation on high income people
Progressive tax
Takes a large percentage of income from low income people
Regressive tax
In the United States, the federal income tax is a _________
Progressive tax
Use of taxes to encourage or discourage certain economic behavior
Tax Incentive
Often imposed on products or activities considered to be unhealthful or damaging to society, such as gambling, alcohol, cigarettes.
Sin Taxes
