Impact of Taxes
What is the term for when taxes are placed on items to encourage or discourage certain activities?
Behavior Adjustment
Means that taxes must be fair - having few loopholes.
Equity
Tax that imposes the same percentage on everyone, regardless of income.
Proportional Tax
Individual Income Tax
Eighty percent of (federal, state, or local) spending is directed toward:
intergovernmental expenditures, public welfare, insurance trust funds, higher education, highways, hospitals
State Government Expenditures
What is the term for the way in which income is allocated (distributed among families)?
Income Redistribution
Term meaning tax laws should be easy to understand.
Simplicity
Tax that imposes a higher percentage on persons with higher income.
Progressive Tax
Tax placed on large donations of money or wealth and is paid by the donator
Gift Tax
Largest categories of (federal, state, or local) spending include:
elementary and secondary education, public utilities, hospitals, police protection
Term for who bears the final burden of the tax (consumer or producer).
Incidence of a Tax
Term meaning taxes should be easy to administer and successful at generating revenue.
Efficiency
Tax that imposes a higher percentage on low income than on high incomes.
Regressive Tax
Funds collected by one level of government that are distributed to another level. Largest source of revenue for state and local governments.
Intergovernmental Revenue
_______ is when spending exceeds revenue for a given year.
Deficit
_______ is all the past deficit added up.
Debt
Principle stating that those who benefit the most from taxes should have to pay the most.
Benefit Principle
Places a tax on the value that manufacturers add to a good at each stage of production.
Value-Added Tax
Taxes paid for Social Security and Medicare, also known as payrole tax, 3rd largest source of federal government revenue.
FICA Taxes
When the federal budget runs a deficit (loses money), the Treasury Department sells __________ to the public to raise money.
Bonds
Which economic impacts of taxes states that taxes can change the incentives for people to save, invest, and work. (_________ and __________)
Productivity and Growth
Principle that people should be taxed based on their ability to pay, regardless of the benefits they recieve.
Ability-to-Pay
Tax on individual income that applies the same rate to every taxpayer, regardless of income.
Flat Tax
Which level of government has income sourced from intergovernmental revenue, property tax, sales tax, hospital fees, and public lotteries?
Local Government Revenue
The federal budget consists of __________ __________, which includes interest payments on borrowed money, Social Security, and medicare (two-thirds of the budget)
Mandatory Spending