econ ch.9

Question 0

incidence of a tax

Answer 0

or the final burden of the tax-can be predicted with the help ofsupply and demand analysis

Question 1

sin tax

Answer 1

a relativiely high tax designed to raise revenue and reduce consumption of a socaillbly undesirable product such as liqour or tabacco

Question 2

taxloopholes

Answer 2

exceptions or oversights in the tax law that allow some people and businesses to avoid paying taxes

Question 3

individual income tax

Answer 3

the tax onpeoples earnings

Question 4

sales tax

Answer 4

a general tax levied on most consumer purchases

Question 5

criteria for effective taxes is?

Answer 5

simplicity and efficiency

Question 6

benefit principle of taxation

Answer 6

those who benefit from government goods and services should pay in porportion to the amount of benefits they recieve

Question 7

ability to pay principle of taxation

Answer 7

the belief that people should be taxed according to their ability to pay, regardless of the benefits they recieve

Question 8

porportional tax

Answer 8

imposes the same tax on everyone, regardless of income

Question 9

average tax rate

Answer 9

total taxable income divided by the total income is constant regardless of income

Question 10

progressive tax

Answer 10

tax imposes a higher % rate of taxation on persons with higher incomes

Question 11

marginal tax rate

Answer 11

tax rate that applies to the next dollar of taxable income, that increases as the amount of taxable income increases

Question 12

regressive tax

Answer 12

a tax that imposes a higher percentage rate of taxation on low incomes than on high incomes

Question 13

payroll witholding system

Answer 13

a system that requires an employer to automatically deduct income taxes from an employers pay check and send it directlyto the government

Question 14

internal revenue service IRS

Answer 14

branch of the US treasury department in charge of collecting taxes

Question 15

tax return

Answer 15

an annual report to the IRS summarizing total income, deductions, and taxes

Question 16

excise tax

Answer 16

a tax on manufacture or sale of selected items, such as gasoline and liqour

Question 17

FICA

Answer 17

federal insurance contributions act tax levied on both employers and employees to pay for socail security and medicare

Question 18

medicare

Answer 18

federal health program available to all senior citizens regardless of income

Question 19

payroll taxes

Answer 19

tax on wages and salaries to finance socail security and medicade costs

Question 20

indexing

Answer 20

is an upward revision of the tax brackets to keep workers from paying more in taxes just because of inflation

Question 21

corporate income tax

Answer 21

the tax a corporation pays on its profits

Question 22

excise tax

Answer 22

a tax on the manufacture or sale of selected items, such as gasoline and liqour

Question 23

luxury good

Answer 23

an economic product (or service)

Question 24

estate tax

Answer 24

the tax the government leveies on the transfer of property when a person dies

Question 25

gift tax

Answer 25

tax on donations of money or wealth and is paid by the person who makes the gift

Question 26

customs duty

Answer 26

a charge islevied on goods brought in fromother countries

Question 27

user fees

Answer 27

charges levied for the use of good or service

Question 28

intergovernmental revenue

Answer 28

funds collected by one level of government that are distributed to another level of government for expenditures

Question 29

property tax

Answer 29

tax on tangible and intangible possesions such as real esate, buildings, furniture, automobiles, farm animals, stocks, bonds, and bank accounts

Question 30

tax assessor

Answer 30

the person who assigns value to property for tax purposes

Question 31

payroll witholding statement

Answer 31

the summary statement attached to a paycheck that summarizes income, tax witholdings, and other deductions

Question 32

accelerated deprecaition

Answer 32

larger than normal deprecaition charges-whch allowed firms to reduce federal income payments

Question 33

investment tax credit

Answer 33

a reduction in business taxes that are tied to investment in new plants and equipment

Question 34

subcharge

Answer 34

oradditional tax above and beyond the base rate

Question 35

alternate minimuim tax

Answer 35

the personal income ratte that applies whenever the amount of taxes paid falls below some designated level- was strenghtened

Question 36

capital gains

Answer 36

.

Question 37

value-added tax

Answer 37

a tax placed on the value that manufactorers add each stage ofproduction VAT

Question 38

flat tax

Answer 38

a porportional tax on individual income after a specified threshold has been reached