Module 7

Question 1

ordinary income (business)

Answer 1

income earned through sale of goods and services

Question 2

ordinary income (personal)

Answer 2

income earned through wages salary tips commissions and bonuses

Question 3

benefit principle

Answer 3

those receiving most benefit are ones paying for it

Question 4

ability to pay principle

Answer 4

says those with more ability to pay should pay

Question 5

progressive tax

Answer 5

results in higher taxes as percentage of income on those with more income

Question 6

regressive tax

Answer 6

results in higher taxes as percentage of income on those with less income

Question 7

flat tax

Answer 7

same percentage of each dollar earned is paid to govt across entire population

Question 8

marginal tax rate

Answer 8

tax rate you paid on last dollar you made

Question 9

average tax rate

Answer 9

taxes paid / income

Question 10

income from interest

Answer 10

counted as ordinary income

Question 11

ordinary dividends

Answer 11

<120 day holding perioid

Question 12

qualified dividends

Answer 12

> 120 day holding period

Question 13

capital gains

Answer 13

profits resulting from investments in capital asset

Question 14

jock taxes

Answer 14

imposed on income earned by visiting players

Question 15

earnings tax

Answer 15

based on where you work

Question 16

sin tax

Answer 16

raise money from doing undesirable things to improve society