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
The largest source of taxes for the federal government
Individual Income Tax
The second highest source of federal revenue.
Social Insurance Taxes
A tax is taken from a worker’s paycheck - is collected.
Payroll tax
a federal program to aid older citizens who have retired, children who have lost a parent or both parents, and people with disabilities.
Social Security
Also known as social insurance
FICA
a national health insurance program for citizens over 65 and certain other groups of people.
Medicare
a program funded by federal and state taxes and administered by states.
Unemployment Compensation
the third largest source of tax revenue for the federal government.
Corporate Income Taxes
a tax on money or property given by one living person to another.
Estate taxes
