Tax

Question 1

what is tax

Answer 1

tax is the money paid by individuals and businesses to the government

Question 2

who pays tax

Answer 2

everyone

Question 3

who collects tax

Answer 3

• state or territory governments collect approximately 16% of total tax total tax revenue from taxes such as payroll tax, stamp duty and land tax
• federal governments in the same period collect about 3% of total tax revenue, largely from rates charged on the owners of properties
• federal government collects tax for goods and services

Question 4

what is income tax?

Answer 4

• You usually have to pay tax when you earn money from employment, pensions, government payments, investments and foreign income

Question 5

tax equation

Answer 5

accessible income - deductions = taxable income

Question 6

non-assessable income

Answer 6

incomes that don’t require tax to be paid

Question 7

tax minimisation

Answer 7

is when you legally arrange your tax affairs to reduce the amount of tax you pay

Question 8

tax evasion

Answer 8

is when wou deliberately lie to the ATO to reduce the amount of tax payable

Question 9

proportional tax

Answer 9

the same persentage is levied, regardless of the level of outcome

Question 10

progressive tax

Answer 10

the higher the income, the higher the percentage of tax paid.

Question 11

regressive tax

Answer 11

the same dollar amount of tax is paid, regardless of the level of income.

Question 12

what are tax deductions

Answer 12

a sum that you can deduct from your taxable income to lower the amount of taxes you owe