Sin tax example
Like a tax on cigarettes
Sin tax
A tax with the dual purpose of raising revenue and discouraging behavior
Social security
Money taken from check to assist in providing a fixed income to retired persons
Social security fact
Comprises 6.2% of the deduction from all of your paychecks
Customs duty
A tax placed upon goods brought into the country
User fees
Money collected in exchange for access to national parks, monuments, ect.
User fees example
Admittance to Yellowstone National Park
Incidence of a tax
The final burden of a tax
Medicare
Tax deduction that provides health insurance to the elderly
Medicare fact
Comprises 1.45% of the deduction from all of your paychecks
Gift tax
A tax on money or wealth that is transferred to others
Estate tax
A tax placed up on property transferred upon ones death
Sales tax
A tax placed upon items at purchase
FICA
The combined deduction of 7.65% of a persons income to the government
Tax loopholes
Different means sought to avoid paying taxes legally
Proportional tax
A tax that takes the same percentage from all persons, like a sales tax
Proportional tax example
Like Illinois state income tax system
Payroll withholding system
This requires employers to take taxes out of each check to employees
Excise tax
A tax on the manufacture or sale of a specific item, like gasoline.
Economic implication of a tax
For example encouraging people to become homeowners
IRS
The Internal Revenue Service
IRS nickname
“The man”
Luxury tax
A tax placed upon specific high priced items, like a yatch.
Benefit principle
Idea that those persons that take advantage of government programs, should pay for them
