A tax that governments impose on financial income generated by all entities within their jurisdiction
100
What is Social Security?
A policy that offers pension to those who retire, so that they'll leave the workforce and open up jobs for younger people or provides a regular income to retired and disabled workers and the unemployed
100
What is a private good?
goods the consumer purchases and consumes
100
What are two criteria used to measure fairness in taxes?
Benefits received and ability to pay
100
What are progressive taxes based on?
Ability to pay
200
What is a tax deduction?
an amount subtracted from adjusted gross income to lower the amount of tax owed. Home mortgage interest, local property tax payments, contributions to charity, and health or business expenses are the most common
200
How old do you need to be to be eligible for medicare?
65
200
What is a public good?
A good often supplied by the government, for which use by one person does not reduce the quantity of the good available for others to use, and for which consumption cannot be limited to those who pay for the good
200
Give an example of a proportional tax
Sales tax, real estate tax
200
What is a regressive tax?
A tax that takes a larger percentage of income from low income groups than from high income groups
300
Give an example of a tax credit.
Child care, residential energy improvement, credit for certain education expenses, business tax credit for starting an employee pension program
300
What are some things taken out of your gross pay?
Social security taxes, medicare taxes, income tax withheld
300
What is shared consumption?
when one person consumes a public good, it does not prevent others from also consuming the good
300
What is a operating budget?
a budget for day-to-day spending needs
300
Why do people's resources differ?
because they have different amounts of wealth or income
400
What are exclusions?
dollar amounts of income that are tax exempt or not subject to federal income tax
400
What is a capital budget
a budget for spending on major investments
400
Give 3 examples of public goods
Answers may vary: school, police, highway
400
List three things state revenue is spent on
education, public safety, public welfare, highways and transportation, arts and recreation, administration
400
Why are proportional taxes considered unfair?
because they have a regressive effect on the taxpayer's total income
500
what is tax evasion? Give an example
evading taxes through illegal means, normally this includes not reporting or under-reporting earned income, even the smalles amount of income
500
What is the difference between gross and net pay?
gross pay is the amount the employee earns, net pay is the amount the employee receives after deduction
500
Give an example of a positive and a negative externalities
(answers may vary) elementary education and air pollution caused by cigarette smoking
500
What is Personal property?
movable possessions or assets - such as jewelry, furniture, and boats
500
What is tax avoidance?
investing in bonds with tax-exempt interst, saving in IRAs for your own retirement, taking the proper number of personal exemptions and other tax credits... corporations putting their profits in off shore havens