Chapter 16 Flashcards
Marginal Tax Rate
The tax rate paid on additional dollar of income
Average Tax Rate
Total tax payment divided by total income
Workers bear at least a majority if not all of the burden of the employers share because
workers would have higher wages without tax
Flat Tax
a tax system that has a constant tax rate
Progressive tax
a tax that imposes higher tax rates on people with higher incomes
Regressive tax:
a tax that imposes higher tax rates on people with lower incomes a tax that imposes higher tax rates on people with lower incomes
Households in the bottom 20 percent of the income distribution pay approximately what percentage of their income in federal taxes?
less than 5 percent
Social Security
SINGLE largest government program in the world
Current payments are
Current payments are paid out of current taxes
Deficit:
that annual difference between federal spending and revenues
National Debt:
the total amount of money owed by the federal government at a given point.
The only way to balance the federal budget is to
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