Questions and Answers
What is a progressive tax?
A proportional tax taxes wage earners with lower incomes at a higher percentage rate than those with higher incomes.
False
What is society?
A group of individuals, usually within a community, who share traditions, interests, and establishments.
What is a tax?
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Expansionary taxation policies encourage growth and are always appropriate to implement.
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According to the chart, how are the citizens being taxed?
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Why do governments collect taxes?
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What type of tax is a sales tax?
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How can contractionary policies hamper economic growth?
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What are examples of programs or projects most likely funded by taxes in the United States?
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Under an expansionary taxation policy, how does the government try to stimulate economic growth?
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How are progressive taxes and regressive taxes similar?
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What is most likely the US government's aim in taxing imported goods?
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How can expansionary policies facilitate economic growth?
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How would you best describe income tax?
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What does the graph indicate about government spending?
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Under a contractionary taxation policy, how does the government try to improve its finances?
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A(n) ________ policy is employed when the government chooses to run a larger deficit.
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How are property taxes usually determined?
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How is an excise tax different from a sales tax?
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Study Notes
Tax Types and Definitions
- Progressive Tax: Higher income earners pay a larger percentage of their income in taxes compared to lower income earners.
- Proportional Tax: Lower income earners incur a higher percentage tax rate compared to higher earners, often considered an uncommon structure.
- Excise Tax: A tax applied to specific products, distinct from general sales tax which applies to all purchases.
Society and Taxation
- Society: Comprises individuals sharing common traditions and interests within a community.
- Tax: A government-imposed fee on income or purchases, allocated for public services and infrastructure.
Government Strategies
- Expansionary Taxation Policies: Aimed at stimulating economic growth by increasing government spending; these policies ensure continuity of necessary services for citizens.
- Contractionary Taxation Policies: Intended to improve government finances by increasing taxes; risks slowing demand and hindering economic growth.
Economic Impact of Taxation
- Importance of Taxation: Governments collect taxes to meet societal needs and fund essential services, such as road construction and maintenance of public parks.
- Disposable Income: Expansionary policies increase disposable income, thereby facilitating economic growth.
Tax Structure and Analysis
- Direct Tax: Income tax is categorized as a direct tax, collected directly from individuals’ earnings.
- Government Spending: Typically, government expenditure exceeds tax collection, implying reliance on deficit spending for financing.
Protective Measures and Goals
- Tariffs on Imported Goods: Taxing imports primarily aims to protect domestic businesses from foreign competition.
- Property Taxes: Determined based on a property's assessed value, forming a crucial part of local government funding.
Summary of Characteristics
- Flat Taxes: Progressive and regressive taxes are both labeled as flat taxes, although their impacts differ based on income levels.
- Sales Tax: Classified as an indirect tax, affecting the final price paid by consumers without directly impacting income.
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Description
Test your knowledge on key terms related to fiscal policy and taxation with our flashcards. Learn about different types of taxes, including progressive and proportional tax systems, and understand their implications for society. Ideal for students studying economics or taxation.
