part two yolo Flashcards
any tax in which the burden falls more heavily on the rich than the poor
progressive tax
any tax in which the burden falls more heavily on the poor than the rich, at least as a percentage of their incomes
regressive tax
the basic public facilities and installations that help an economy function, including roads, bridges, airports, power and water systems, and other utilities
infrastructure
the idea that a tax system should be fair
tax equity
the idea that citizens should be taxed according to their income or wealth; one of two basic approaches to tax equity
ability-to-pay principle
the idea that citizens who benefit from a particular government program should pay for it; one of two basic approaches to tax equity
benefits-received principle
the allocation of the burden of a tax between consumers and producers; tax incidence is said to fall on the group that bears the burden of the tax, no matter from whom the tax is collected
tax incidence
something that is taxed, such as personal income or a piece of property
tax base
the percentage that is levied on the value of whatever is being taxed, such as income or property
tax rate
the set of laws that govern federal, state, or local taxes
tax code
a direct popular vote on a proposal to raise taxes
tax referendums
a loss of productivity or economic well-being for which there is no corresponding gain
deadweight loss
expenditures that can be raised or lowered as a legislature sees fit; spending that is not mandatory
discretionary spending
a tax that takes the same share of income at all income levels; a flat tax is proportional
proportional tax
a tax on the wages a company pays its employees; examples include the Social Security tax and the Medicare tax
payroll tax
taxes levied on real property—land and buildings—and sometimes on personal property, such as cars and boats
property taxes
a proportional income tax that applies the same tax rate to all taxpayers, regardless of income
flat tax
a shortfall between government revenues and expenditures in any given year
federal deficit
a 12-month accounting period
fiscal year
a system in which employers deduct a certain amount of tax from workers’ paychecks
withholding
an official document that lists a worker’s wages for the previous year and the amount of tax that was withheld; W-2 forms are filed with federal income tax returns
W-2 Form
an official review of an income tax return to assess the return’s accuracy
audit
the value of a piece of property for tax purposes, as determined by a public official known as an assessor
assessed value
the rate at which the last dollar a person earns in a given year is taxed
marginal rate tax
a federal payroll tax designed to fund Social Security benefits, including old-age pensions and income for people with disabilities
Social Security Tax
a state payroll tax that funds programs to help workers who are injured on the job
state disability tax
a tax on the purchase of goods and services
sales tax
an excise tax placed on certain goods or services to discourage their consumption; examples include excise taxes on alcohol, cigarettes, and gambling
sin taxes
a federal payroll tax designed to fund Medicare, the national health insurance program for the elderly and disabled
Medicare tax
government expenditures that are fixed by law and can only be changed by new legislation; spending that is not discretionary
mandatory spending
a state payroll tax used to assist workers who lose their jobs
unemployment tax
a tax applied to the profits of a corporation
corporate income tax
a tax on the manufacture or sale of a good
excise tax
a federal tax on the assets left to heirs by someone who dies
estate tax
a government program that provides benefits to individuals based on their age, income, or some other criteria
entitlements
taxes levied on the sale of high-priced luxury goods, such as diamond jewelry and private jets
luxury taxes
a state tax on the assets left to heirs by someone who dies; similar to the federal estate tax
inheritance tax
the total amount owed by a nation’s government as a result of borrowing
national debt
a large-scale gambling game organized to raise money for a public cause
lotteries
book by Adam Smith where he laid down the four principles of taxing
The Wealth of Nations
