Chapter 6
Business 211 with Morgan at Trident Technical College
About this deck
By: Alexandra Rowe
Textbook:
Economics Today: The Micro View plus MyEconLab 1-semester Student Access Kit (15th Edition)
Created: 2011-06-13
Size: 23 flashcards
Views: 4
Textbook:
Economics Today: The Micro View plus MyEconLab 1-semester Student Access Kit (15th Edition)Created: 2011-06-13
Size: 23 flashcards
Views: 4
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Three sources of government funding
1-fees, or user charges
2-Taxes
3-Borrowing
Government Budget Constraint
–The limit on government spending and transfer payments
–Imposed by the fact that every dollar spent must be provided for by taxes
Tax Base
The value of goods, services, wealth, or incomes subject to taxation
Tax Rate
The portion of the tax base that must be paid to a government as taxes
Marginal Tax Rate
The change in the tax payment divided by the change in income
MTR=Change in taxes due/change in taxable income
Tax Bracket
A specified interval of income to which a specific and unique marginal tax rate is applied
Average Tax Rate
The total tax payment divided by total income
Proportional Taxation
A tax system in which, regardless of an individual's income, the tax bill comprises exactly the same proportion
-Marginal tax rate= average tax rate
Progressive Taxation
A tax system in which, as income increases, a higher percentage of the additional income is paid as taxes
-Income taxes
-Marginal tax rate > average tax rate
Regressive Taxation
A tax system in which as more dollars are earned, the percentage of tax paid on them falls
-Social Security
-marginal tax rate < average tax rate
Ad Valorem Taxation
assessing taxes by charging a tax rate equal to a fraction of the market price of each unit purchased
Capital Gain
The positive difference between the purchase price and the sale price of an asset. If a share of stock is bought for $5 and then sold for $15, the capital gain is $10.
Capital Loss
The negative difference between the purchase price and the sale price of an asset
Dynamic Tax Analysis
economic evaluation of tax rate changes that recognizes that the tax base eventually declines with ever-higher tax rates, so that tax revenues may eventually decline if the taz rate is raised sufficiently
Excise Tax
A tax levied on purchases of a particular good or service
Inflation-Adjustment Return
A rate of return that is measure in terms of real goods and services; that is, after the effects of inflation have been factored out.
Rate of Return
the proportional annual benefit that results from making an investment
Retained Earning
Earning that a corporation saves, or retains, for investment in other productive activities; earnings that are not distributed to stockholders
Sales Tax
Tax assessed on the prices paid on most goods and services
Social Security Contributions
The mandatory taxes paid out of workers' wages and salaries
Static Tax Analysis
Economic evaluation of the effects of tax rate changes under the assumption that there is no effect on the tax base, meaning that there is an unambiguous positive relationship between tax rates and tax revenues
Tax Incidence
The distribution of tax burdens among various groups in society
unit Tax
A constant tax assessed on each unit of a good that consumers purchase
About this deck
By: Alexandra Rowe
Textbook: Economics Today: The Micro View plus MyEconLab 1-semester Student Access Kit (15th Edition)
Created: 2011-06-13
Size: 23 flashcards
Views: 4
Textbook:
Economics Today: The Micro View plus MyEconLab 1-semester Student Access Kit (15th Edition)Created: 2011-06-13
Size: 23 flashcards
Views: 4
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have used this website for three exams, and I see a huge difference in my test results.”
Naj
Naj