Taxes Flashcards
1
Q
Tax Base
A
The sum of people, property, etc. that can be taxed by a government.
2
Q
Ramsey Rule
A
Tax the least elastic goods the most.
3
Q
2 effects of taxes
A
- Income Effect
2. Substitution Effect
4
Q
Income Effect
A
As taxes go up, people work more to make up for the loss of income.
5
Q
Substitution Effect
A
The more money I make the less I get to take home.
6
Q
How much do the rich get taxed?
A
-The top 1% of wage earners make about 20% of the aggregate income and pay 40% of the taxes. This has not changed substantially since 1980.
