Questions and Answers
What is a tax?
What is revenue?
Income received by a government from taxes and non-tax sources
What is tax base?
Income, property, good or service that is subject to a tax
What does individual income tax refer to?
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What is sales tax?
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What is property tax?
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What is corporate income tax?
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What is a proportional tax?
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What characterizes a progressive tax?
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What is a regressive tax?
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What does incidence of a tax refer to?
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What is withholding?
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What is a tax return?
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What is taxable income?
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What is a personal exemption?
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What are deductions?
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What does FICA stand for?
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What is Social Security?
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What is Medicare?
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What is an estate tax?
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What is a gift tax?
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What is a tariff?
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What is a tax incentive?
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What is mandatory spending?
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What is discretionary spending?
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What does entitlement mean in economics?
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What is Medicaid?
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What is an operating budget?
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What is a capital budget?
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What is a balanced budget?
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What does it mean for an entity to be tax exempt?
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What is real property?
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What is personal property?
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What is a tax assessor?
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Study Notes
Taxation Concepts
- Tax: Mandatory payments made to governmental bodies at local, state, or national levels.
- Revenue: Income generated by the government from taxes and other sources besides taxation.
- Tax Base: The certain income, property, goods, or services that can be taxed.
Types of Taxes
- Individual Income Tax: Tax imposed on personal income earned by individuals.
- Sales Tax: Tax applied to the selling price of goods and services.
- Property Tax: Tax levied on the assessed value of real estate properties.
- Corporate Income Tax: Tax on a corporation’s profits.
Tax Structures
- Proportional Tax: Tax system where the tax rate remains constant regardless of income level.
- Progressive Tax: Tax system where the tax rate increases as the taxpayer's income increases.
- Regressive Tax: Tax system where the tax rate decreases as taxpayer income increases.
Tax Liability and Payment
- Incidence of a Tax: Refers to who ultimately bears the burden of the tax.
- Withholding: Process of deducting tax from an employee's paycheck before it is received.
- Tax Return: Official document filed to report income and calculate taxes owed.
Taxable Income and Deductions
- Taxable Income: Income subject to taxes, calculated by subtracting deductions and exemptions from total income.
- Personal Exemption: Fixed amount deducted from gross income for the taxpayer, spouse, and dependents.
- Deductions: Variable expenses that reduce gross income, lowering taxable income.
Specific Tax Types
- FICA: Tax that supports Social Security and Medicare programs.
- Social Security: Insurance program for retirees and those with disabilities; includes Old Age, Survivors, and Disability Insurance (OASDI).
- Medicare: National health program aiding those over 65 or with qualifying disabilities.
- Estate Tax: Tax imposed on the total value of a deceased person's estate.
- Gift Tax: Tax charged on transfers of money or property from one individual to another.
- Tariff: Tax applied to goods imported into a country.
Government Spending
- Tax Incentive: Tax policy designed to motivate certain behaviors or activities.
- Mandatory Spending: Government expenditure mandated by existing laws, affecting programs that must be funded.
- Discretionary Spending: Budgetary allocation that government planners can adjust based on priorities.
Welfare and Budgeting
- Entitlement: Government program that guarantees benefits to individuals who meet established criteria.
- Medicaid: Entitlement program providing health services to low-income families, disabled individuals, and elderly nursing home residents.
- Operating Budget: Budget for ongoing operational costs and daily expenses.
- Capital Budget: Budget allocated for significant capital expenditures and investments.
- Balanced Budget: Financial plan where total revenues match total expenditures.
Property Types and Assessment
- Tax Exempt: Status indicating a person or organization not obligated to pay taxes.
- Real Property: Tangible land and buildings subject to property taxation.
- Personal Property: Movable possessions, including items like jewelry and furniture.
- Tax Assessor: Official responsible for determining property values for taxation purposes.
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Description
Test your knowledge of key economic terms in Chapter 14 with these flashcards. Each card provides a term along with its definition, covering essential concepts such as taxes, revenue, and taxable income. Perfect for students looking to reinforce their understanding of economic principles.