Taxes Flashcards
A ___ is a mandatory payment to a local, state, or national government
tax
________ is government income from taxes and nontax sources
Revenue
The right of government to tax are set down in the US and in state _____________ (16th Amendment allows tax)
constitutions
The ________-_________ __________ of taxation holds people who benefit directly from public goods should pay for them in proportion to the amount of benefits received
benefits-received principle
The ________-__-___ _________ 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
Tax systems attempt to meet three criteria:
Equity
Simplicity
Efficiency
The ______, or fairness, of a tax is established by how uniformly the tax is applied
equity
Everyone who buys ________ pays the same tax
gasoline
The __________ of a tax is determined by how easy it is for the taxpayer to understand and how easy it is for the government to collect
simplicity
The __________ ______ ___ best meets the criterion of efficiency
individual income tax
who? imposes taxes on various forms of income and wealth in order to raise the revenue to provide public goods and various other services
Government
A ___ ____ is a form of wealth - such as income, property, goods, or services - that is subject to taxes
tax base
__________ ______ ___ is based on an individual’s income from all sources
Individual income tax
_________ ______ ___ is based on a corporation’s profits
Corporate income tax
______ ___ is based on the value of goods or services at the time of sale
Sales tax
_________ ___ is based on the value of an individual’s or business’s assets
Property tax
Homeowners and business owners pay ________ ___ based on the value of their buildings and the land on which the buildings stand
property taxes
Property tax may also be imposed on other assets such as ____________
automobiles
A _____________ ___takes the same percentage of income from all taxpayers
proportional tax
A ___________ ____ places a higher percentage rate of taxation on high income people
progressive tax
A __________ ___ takes a larger percentage of income from low income people
regressive tax
States with ____ ___ generally charge rates from three to five percent of income
flat tax
In the United States, the federal income tax is a ___________ ___, because the tax rate increases as income increases
progressive tax
Some taxes are __________ because they are applied to sales, not income
regressive
Although a ______-___ ____ is applied equally to all items subject to the tax, the tax as a percentage of income is regressive
sales-tax rate
The _________ of a tax is the final burden of that tax. In other words, it is the impact of the tax on a taxpayer
incidence
A ___ ________ is the use of taxes to encourage or discourage certain economic behaviors
tax incentive
___ ______ are 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 is the _________ _______ ___
individual income tax
The government began using the income tax after the ____ __________ to the Constitution which occurred in 1913
16th Amendment
______ _________ ______ are the second highest source of federal revenue
Social insurances taxes
_______ ___ __________ share the burden of these taxes
Workers and employers
To make it easier for taxpayers and the government , a _______ ___ - a tax is taken from a worker’s paycheck - is collected
payroll tax
The payroll tax is deducted from a paycheck as a ____________, or money taken from a worker’s pay before the worker receives it
withholding
The ___ is the government agency that collects the money for the federal government and administers the federal tax system
IRS
The _______ ______ ____ is a progressive tax based on the ability-to-pay principle of taxation
federal income tax
