Fiscal Policy: Taxes Flashcards

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is a progressive tax?

A tax in which wage earners with lower incomes are taxed at a higher percentage rate than earners with higher incomes

An amount taken from income or added to purchases by various levels of government

A tax in which wage earners are taxed at the same percentage rate, regardless of their income

A tax in which wage earners with higher incomes are taxed at a higher percentage rate than earners with lower incomes (correct)

What is a proportional tax?

A tax where higher incomes are taxed at higher rates

A tax specifically for property transactions

A tax where wage earners are taxed at the same percentage rate, regardless of their income (correct)

A tax where lower incomes are taxed at higher rates

What is a regressive tax?

A tax in which wage earners with lower incomes are taxed at a higher percentage rate than earners with higher incomes (correct)

A tax that applies to specific products

A general tax on income that helps fund government services

A tax in which wage earners with higher incomes are taxed at a higher percentage rate

What is a society?

A group of individuals, usually within a community, who share traditions, interests, and establishments. Signup and view all the answers

What is a tax?

An amount taken from income or added to purchases by various levels of government. Signup and view all the answers

What type of tax is income tax?

Direct tax Signup and view all the answers

What are examples of programs or projects funded by taxes in the United States?

All of the above Signup and view all the answers

A sales tax is a type of?

Indirect tax Signup and view all the answers

How are progressive taxes and regressive taxes similar?

Both are determined based on income. Signup and view all the answers

A(n) ____________ policy is employed when the government chooses to run a larger deficit.

expansionary Signup and view all the answers

How is an excise tax different from a sales tax?

An excise tax applies to specific products. Signup and view all the answers

High government expenditures can lead to a bigger?

deficit Signup and view all the answers

Property taxes are usually determined based on?

The value of the property. Signup and view all the answers

Which best explains how contractionary policies can hamper economic growth?

They reduce disposable income. Signup and view all the answers

What gives the US government the power to collect taxes?

The Constitution. Signup and view all the answers

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.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

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.