Questions and Answers
What is a progressive tax?
What is a proportional tax?
What is a regressive tax?
What is a society?
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What is a tax?
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What type of tax is income tax?
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What are examples of programs or projects funded by taxes in the United States?
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A sales tax is a type of?
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How are progressive taxes and regressive taxes similar?
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A(n) ____________ policy is employed when the government chooses to run a larger deficit.
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How is an excise tax different from a sales tax?
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High government expenditures can lead to a bigger?
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Property taxes are usually determined based on?
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Which best explains how contractionary policies can hamper economic growth?
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What gives the US government the power to collect taxes?
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Study Notes
Tax Types
- Progressive Tax: Higher-income earners pay a greater percentage than lower-income earners, promoting equity.
- Proportional Tax: All wage earners pay the same percentage regardless of income, maintaining uniformity in taxation.
- Regressive Tax: Lower-income earners face a higher tax percentage than higher-income earners, which can increase economic disparity.
- Direct Tax: Income tax is classified as a direct tax, directly taken from individuals' earnings.
- Indirect Tax: Sales tax falls under indirect tax, as it is added to purchases rather than deducted from income.
Taxation and Funding
- Taxes are governmental charges on income or purchases, essential for funding public services and infrastructure.
- Programs typically funded by taxes in the U.S. include maintaining state parks, constructing highways, and garbage collection.
- Property taxes are assessed based on the property value, ensuring that the tax burden is proportional to the wealth represented by held property.
Economic Policies
- Expansionary Policy: Implemented when the government opts for larger deficits, often to stimulate economic growth.
- Contractionary Policy: These policies can hinder economic growth by reducing disposable income available for spending.
Tax Characteristics
- Excise taxes target specific products, unlike sales taxes which apply broadly to most goods.
- Both progressive and regressive taxes are influenced by income levels, yet they operate in fundamentally opposing ways to impact taxpayers.
Constitutional Power
- The U.S. government's authority to levy taxes is derived from the Constitution, underpinning its fiscal policies and financial operations.
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Description
This quiz explores key concepts in fiscal policy, focusing on different types of taxes such as progressive, proportional, and regressive taxes. Test your understanding of how these tax structures affect wage earners based on their income levels.
