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Econ Chapter 14/15 > Chapter 14 Terms > Flashcards

Chapter 14 Terms Flashcards

(60 cards)

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1
Q

Sin Tax

A

Relatively high tax designed to raise revenue while reducing consumption of a socially undesirable product

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2
Q

Distribution of Income

A

Way in which income is allocated among families, individuals, or other groups

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3
Q

Validity

A

Justification

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4
Q

Incidence of a tax

A

Final burden if a tax

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5
Q

Tax Loopholes

A

Exceptions or oversights in the tax law allowing taxpayer to avoid taxes

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6
Q

Sales Tax

A

General state or city tax levied on a product at the time of sale

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7
Q

Individual Income Tax

A

Tax levied on the wages, salaries, and other income of individuals

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8
Q

Internal Revenue Service (IRS)

A

Branch of the US treasury department that collects taxes

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9
Q

Tax Return

A

Annual report filed with local, state, or federal government detailing Income earned and taxes owed

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10
Q

Ability-to-pay

A

Principle of taxation based on belief that taxes should be paid according to level of income regardless of benefits received

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11
Q

Proportional Tax

A

(Or flat) tax in which percentage of income paid in tax is the same regardless of the level of income

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12
Q

Average Tax Rate

A

Total taxes paid divided by total taxable income

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13
Q

Medicare

A

Federal healthcare program for senior citizens regardless of income

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14
Q

Progressive Tax

A

Percent of income taxes rises as level of income rises

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15
Q

Regressive Tax

A

Percentage of income taxed goes down as income goes up

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16
Q

Value-added tax (VAT)

A

Tax on the value added at every stage of the production process

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17
Q

Flat tax

A

Proportional tax on individuals income after a specific threshold has been reached

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18
Q

Alternative Minimum Tax

A

Personal income tax rate that applies to cases where taxes would otherwise fall below a certain level

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19
Q

Capital Gains

A

Profits from the sale of an asset held for 12 months or longer

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20
Q

Fiscal

A

12-month financial planning period

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21
Q

Coincide

A

Happen or exist at the the same time

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22
Q

Appropriation Bill

A

Legislation authorizing spending for certain purposes

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23
Q

Continuing Budget Resolution

A

An agreement to fund a government agency at certain levels

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24
Q

Budget Deficit

A

Negative balance after expenses are subtracted from revenue

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25
Budget Surplus
Positive balances after expenses are subtracted from revenues
26
Payroll Withholding System
Method of automatically removing deductions from a paycheck
27
Indexing
Adjusting of tax brackets to offset the effects of inflation
28
Payroll Tax
Tax on wages and salaries to finance social securities and medical costs
29
FICA
Federal insurance contribution act: tax levied on employers and employees to support social security and Medicare
30
Corporate Income Tax
Tax on corporate profits
31
Excise Tax
General revenue tax levied on the manufacture or sale of selected items
32
Estate tax
Tax on the transfer of property when a person dies
33
Gift Tax
Tax on donations of money or wealth that is paid by the donor
34
Customs Duty
Tax on imported products
35
User Fee
Fee paid for the use of a food or service
36
Public sector
That part of the economy made up of the local state and federal governments
37
Earmarks, or pork
A line item budget expenditure that circumvents normal budget building processes and procedures and benefits a small number of people or businesses
38
Mandatory spending
Federal spending authorized by the law that continues without the need for annual approvals of congress
39
Discretionary spending
Spending for federal programs that must receive annual authorization
40
Transfer Payments
Payments fir which the government receives neither goods nor services in return
41
Medicaid
Joint federal-state medical insurance program for low income people
42
Deficit Spending
Annual government spending in excess of taxes and other revenues
43
National debt
Total amount borrowed from investors to finance the governments deficit spending
44
Balanced Budget
Annual budget in which expenditures equal revenues
45
Trust Funds
Special accounts used to hold revenues designated for a specific expenditure such as social security Medicare or highways
46
Per capita
Per person
47
Private sector
That part of the economy made up of private individuals and businesses
48
Crowding-out-effect
Higher than normal interest rates and diminishing access to financial capital faced by private investors when government increases its borrowing in financial markets
49
Pay as you go provision
Requirement that new spending proposals or tax cuts must be offset by reductions elsewhere
50
Line item veto
Power to cancel specific budget items without rejecting the entire budget
51
Spending cap
Limits on annual discretionary spending
52
Entitlements
Program or benefit using established eligibility requirements to provide health nutritional or income supplements to individuals
53
Sequester
Law that requires automatic budget cuts
54
Debt ceiling
Total amount of money the federal government is allowed to borrow
55
Intergovernmental revenue
Funds that one level of the government receives from another level
56
Balanced budget amendment
Constitutional amendment requiring government to spend no more than it collects in taxes and other revenues, excluding borrowing
57
Intergovernmental expenditures
Funds one level of the government transfers to another level for spending
58
Property tax
Tax on tangible and intangible possessions such as real estate buildings furniture stocks bonds and bank accounts
59
Tax assessor
Person who examines and values properly for tax purposes
60
Natural monopolies
Market structure in which average costs of production are lowest when all output is produced by a single firm

Econ Chapter 14/15 (2 decks)

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