TAXES Flashcards
What is a Tax
Mandatory payments collected from individuals and corporations by a government entity to fund government activity
What is a proportional tax system
A proportional tax system is when firms are required to pay a flat rate of tax - the same percentage of their profit
What is a progressive tax system
A progressive tax system means that the rate of tax paid rises as income increases. Australia’s income tax system is progressive but the marginal rate rises in a series of income brackets
What is regressive tax system
It takes a larger percentage of income from low-income earners than from higher income earners
What is an indirect tax
Any type of tax that is levied on goods and services rather than on income or profits. The tax burden can be shifted from the producer or seller to the consumer
Top 5 Government Revenue
Income Tax - 49.6%
Goods and Services Tax - 14.4%
Excise and Customs Duty - 7.6%
Non tax revenue - 6.9%
Superannuation Tax - 3.3%
What is a direct tax
A tax that a person or organization pays directly to the entity that imposed it
Examples of direct tax
Personal income tax, property tax, capital gains tax
What is income tax
Income tax isapplied to an individual’s taxable income and is paid on all forms of income. Government use tax income to gain revenue
Companies are subject to pay a flat tax rate on
30% of their taxable income
