Flashcards in Chapter 9 & 12 Microeconomics Deck (20):
Rich people should pay more taxes
Price of goods in the world market
Tax payers with similar income levels should pay the same amount of tax
Tax on a good produced abroad and then sold domestically
What are the 4 benefits of trade
More goods to choose from
Cost is lowered through economics of scale
What is an example of a Tarif?
If Toyota cars are Japanese made cars that are sold in the US, then the US taxes them
Economics of Scale
Cost is lowered when goods are produced in large quantities
Ability to Pay Principle
Taxing people based on them being rich or poor
High income tax payers, pay a larger amount of their income
Marginal Tax Rate
the amount taxes increase from an additional dollar of income
What are the 2 largest sources of tax revenue for the United States?
Individual Income Tax
the price of a good that is sold and produced in the same country
Average Tax Rate Formula
----------- x 100
Which tax system best describes the U.S. federal tax system?
Tax that is the same for anyone
All tax payers pay the same fraction of income
What is an example of Proportional Tax?
If the tax rate is 40% everyone gets taxed at the same rate
-income = 100
- tax paid $40
- then income = 1000
-tax = $400
The idea that people should pay taxes based on the benefits they receive
What is an example of a benefits principle?
Money gotten from gasoline tax should be used to fix roads
People that buy gasoline are the people who use roads