Taxation Flashcards

1
Q

Where is tax sourced from?

A

Income, goods and services, property and wealth

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2
Q

Purpose of tax

A

Raise revenue, redistribution of income from wealthy to poor, resource allocation, regulating business cycle fluctuations

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3
Q

Impact

A

Where the tax is applied

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4
Q

Incidence

A

Where the burden falls/who pays

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5
Q

PAYG

A

Pay as you go

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6
Q

Direct taxation

A

Collected from income, impact/incidence on same person

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7
Q

Indirect taxation

A

Collected from expenditure, seller passes tax price to consumers

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8
Q

Progressive tax

A

Claims higher proportion of income as it rises

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9
Q

Regressive tax

A

Decreasing proportion of income as it rises

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10
Q

Proportional tax

A

Claimed at equal rate regardless of income

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11
Q

Principles of taxation

A

Fair, simple, efficient

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12
Q

Canons of taxation

A

Equity, economy, certainty, convenience

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13
Q

Horizontal equity

A

Taxpayers earning same should pay same

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14
Q

Why achieve principles of taxation?

A

Improve economic wellbeing

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15
Q

Vertical equity

A

Taxpayers with greater capacity to pay tax should pay higher amounts

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16
Q

Why should taxation systems be simple?

A

Participants should understand what and how much taxes they pay, convenient as possible

17
Q

How are taxation systems made to be efficient?

A

Benefits must outweigh costs, same levels of tax for industries/products

18
Q

FBT

A

Highest marginal tax rate on non-cash benefits with salary package

19
Q

Incidence and impact of company tax

A

Impact on company, incidence on consumers

20
Q

Wholesales sales tax

A

Rate of tax based on luxury of item, 1930s-2000

21
Q

GST

A

10% tax on non-essentials

22
Q

Excise duties

A

Raise large revenue without affecting consumption patterns , inelastic products

23
Q

Customs duty

A

Protects Australian producers from overseas competition

24
Q

CGT

A

Levied on profits from sold assets held for 12+ months, adjusted for inflation

25
Q

What does CGT apply to?

A

Shares, investment properties, business goodwill, items bought with intention to resell

26
Q

What does CGT NOT apply to?

A

Personal items (houses, cars, boats)

27
Q

Stamp duty

A

Levied on ransfer of ownership of property/assets

28
Q

Dividend imputation

A

1987, prevents company profits from being taxed twice

29
Q

Which products tend to have excise duties?

A

Petrol, cigarettes, alcohol

30
Q

Why are regressive taxes “unfair”?

A

Uses higher proportion of low earner’s income

31
Q

Marginal income tax rate

A

The cents per dollar rate of tax paid