Taxes : 4/13/16 Flashcards
A ___ is a mandatory payment to a local, state, or national government.
Tax
R_______ is government income from taxes and nontax sources.
Revenue
The rights of the government to tax are set down in the ____ c_________ and in s_____ constitutions.
U.S. Constitutions, state
The b______-r_____ p______ of t_______ holds people who benefit directly from public goods should pay for them in proportion to the amount of benefits received.
Benefit-received principle of taxation
The a______-__-___ p_______ of t_______ holds that people should be taxed on their ability to pay to matter the level of benefits they receive.
Ability-to-pay principle of taxation
Tax systems attempt to meet three criteria. : E_____, s______, and e_______.
Equity, simplicity, efficiency
The e____, or f______, of a tax is established by how uniformly the tax is applied. Ex : Everyone who buys gasoline pays the same tax.
Equity, fairness
The s________ 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 individual income tax best meets the criterion of e________.
Efficiency
Government imposes taxes on various forms of i_____ and w_____ in order to raise the r_____ to provide public goods and various other services.
Income, wealth, revenue
A t__ b___ is a form of wealth– such as income, property, goods, or services– that is subject to taxes.
Tax base
I_______ i____ t__ is based on an individual’s income from all sources.
Individual income tax
C________ i_____ t__ is based on a corporation’s profits.
Corporate income tax
S____ t__ is based on the value of goods or services at the time of sale.
Sales tax
P______ t__ is based on the value of an individual’s or business’s assets.
Property tax
Homeowners and business owners pay p______ t____ based on the v_____ of their buildings and the l___ on which the buildings stand.
Property taxes, value, land
P______ t___may also be imposed on other assets such as a_________.
Property tax, autombiles
A p_________ t__ takes the same percentage of income from all taxpayers.
Proportional tax
A p________ t__ places a higher percentage rate of taxation on high income people.
Progressive tax
A r_________ t__ takes a larger percentage of income from low income people.
Regressive tax
States with f___ t____ generally charge rates from _____ to ____ percent of income.
Flat taxes, three to five
Cities and counties with p_________ t____ charge about ___ to ____ percent of income.
Proportional taxes, one, three
In the US, the federal income tax is a p_________ t__, because the tax rate increases as income increases.
Progressive tax
Some taxes are r______ because they are applied to s___, not i____. : Ex : Although a sales-tax rate is applied equally to all items subject to the tax, the tax as a percentage of income is regressive.
Regressive, sales, income
The i_______ of a t__ is the final burden of that tax. In other words, it is the impact of the tax on a taxpayer.
Incidence of a tax
A t__ i_______ is the use of taxes to encourage or discourage certain economic behaviors.
Tax incentive
S__ t____ are often imposed on products or activities considered to be unhealthful or damaging to society, such as gambling, alcohol, or cigarettes.
Sin taxes
The largest source of taxes for the federal government is the i________ i____ t__.
Individual income tax
The government began using the income tax after the __th Amendment to the Constitution which occurred in ___.
16, 1913
S______ i______ t____ are the second highest source of federal revenue. : Workers and employers share the burden of these taxes.
Social insurance taxes
To make it easier for taxpayers and the government, a p_____ t__– a tax taken from a worker’s paycheck– is collected.
Payroll tax
The p_____ t__ is deducted from a paycheck as a withholding, or money taken from a worker’s pay before the worker receives it.
Payroll tax
The ___ is the government agency that collects the money for the federal government and administers the federal tax system.
IRS
