taxes Flashcards
three tax structures
progressive
proportional
regressive
progressive tax
as income increases, percentage of income paid in taxes increases
proportional tax
percentage of income remains the same for all income levels
regressive tax
percentage of income paid in taxes decreases
four tax bases
individual
corporate
property
sales
individual tax
based off earnings
corporate tax
company’’s profit
sales tax
based on goods and services
property tax
real estate and other property
who pays the tax if a product is elastic
producers
who pays the tax if a product is inelastic
tax passed along to consumer
four tax criteria
simplicity
efficiency
certainty
equity
benefits received principle
benefit from public goods, pay for them in proportion to the amount of benefits received (gas & sales)
ability to pay principle
taxed based on their ability to pay, no matter the benefits (income)
three sources of federal revenue
personal income
social security
corporate income
