Taxes
sales tax
sales tax- percent sales price (some products are not taxed)
-no natl sales tax
-most states
-state of texas sales tax- 6.25%
-city of austin- 1.0%
-capital metro- 1.0%
what are factors of production?
thing necessary to produce any good/service
name and describe the three types of budgets
a) balanced: rev=expend
b) surplus: rev>expend
c) deficit: rev<expend
profit
what is total income-expenses
mandatory government spending
required by law
a) entitlements: social security, medicare, medicaid
b) interest payments on debt
gift and estate tax
gift tax-tax on value of money transferred to others while you're alive
estate tax-
tax on value of money and property transferred to others upon your death
what is a market economy?
market economy(capitalism)
a) individual citizens/private companies control factors of production
-land privately owned, control wages and labor
b) private property
c) private companies and citizens make important economic decisions
d) competition
e) people and companies are motivated by money (profit-seeking)
IN A FREE-MARKET ECONOMY THERE IS NO REDISTRIBUTION OF WEALTH
what is budget deficit
the shortfall in a budget
-one year difference between expending and revenue
3 trillion deficit
depression
what is deep and or long lasting recession
social security
mandatory federal pension program
customs duties
tax imposed on goods when transported across international borders
command economy
command economy(north korea closest)
a) govt controls factors of production
-people assigned jobs, wages, etc.
b) no private property
-all property is owned by govt
c) major economic decisions made by govt
gross domestic product
the total value of all goods and services produced in a country in a year
-measures size of economy
taxable income
income-deductions
capital
something other than land/labor used to produce
-equipment
-money(usually)
-interest
What is excise tax and what is it put on? What is the federal excise tax on cigarettes and gasoline?
a specific type of sales tax(federal or state)
-sin taxes
-tax on harmful products whose use is not illegal but discouraged
-liquor
-tobacco
-guns
-gasoline
-fireworks
-marijuana
cigarettes- $1..50
gasoline- 18.4 cents
what is corporate income tax?
% of corps profit, not income
paid by businesses not individuals
what is a bond?
and IOU. you lend money to the govt and they promise you back with interest in the future
recession
a period of 2 consecutive quarters with decreasing GDP
-gdp does down (economy shrinks)
-less stuff being produced
-lower employment
-less tax revenue, higher govt expenditures to the poor
money going out
property tax - a percent of the appraisal of the property you own
-the main source of revenue for local govt
-city
-county
-school district (most)
-acc
-hospitals
-paid every year you own the property
-real estate
medicare/medicaid tax
-2.9% of paycheck
-1.45% paid by employee
-1.45% paid by employer
medicare is a govt health insurance for elderly
medicaid is a govt health insurance program for poor
what is national debt?
accumulated total of prior budget deficits
30 trillion dollars in national debt
laissez-faire
economics theory that restricts govt interventions in the economy
govt needs money to do stuff for us
land & labour
physical space
-farmland
-office
-kitchen
work
-your labor
-volunteers
-paid labor