Ch 14 Vocab Flashcards
A relatively high tax designed to raise revenue while reducing consumption of a socially undesirable product such as liquor or tobacco.
Sin Tax
The way in which income is allocated among families, individuals, or other groups.
Distribution of Income
The final burden of the tax.
Incidence of a Tax
A general tax levied on the most consumer purchases.
Sales Tax
The federal tax on people’s earnings.
Individual Income Tax
Imposes the same percentage rate of taxation on everyone, regardless of income.
Proportional tax
Imposes a higher percentage rate of taxation on higher incomes than on lower ones.
Progressive Tax
Imposes a higher percentage rate of taxation on low incomes than on high incomes.
Regressive Tax
A proportional tax on individual income after a specified threshold has been reached.
Flat Tax
Profits from the sale of an asset held for 12 months or longer.
Capital Gains
A 12-month financial planning period that may or may not coincide with the calendar year.
Fiscal Year
A negative balance that results when expenditures exceed revenues.
Budget Deficit
An important revenue source known as the Social Security Payroll Tax. It is deducted directly from payments.
Payroll tax
The Federal Insurance Contributions Act tax, levied on employers and employees equally for Social Security and Medicare.
FICA
The tax a corporation pays on its profits.
Corporate Tax
