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22 Cards in this Set
- Front
- Back
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Types of Tax Rates |
Can be progressive, proportional, and regressive. |
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2 components of Tax |
Tax Base and Tax Rate |
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Progressive Tax Rate |
A rate that increases as the tax base increases. Rates go higher with more income for example. |
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Proportional Tax Rate |
A rate that is constant, regardless of the size of the tax base. |
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Regressive Tax Rate |
A rate that decreases as the tax base increases. |
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Example of Proportional Tax Rate |
A sales tax |
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Example of Regressive Tax rate |
Federal Employment Taxes, like FICA and FUTA. |
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4 Tax Bases |
Transactions Property or Wealth Privileges and Rights Income on gross or Net of Expense basis. |
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3 types of Transaction Taxes |
Sales and Excise Taxes Employment Taxes Transfer of Wealth Tax |
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Difference between Excise and Sales Tax |
Differ by their tax bases. One is specific to a good or service and the other is general and broad based. |
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Sales Tax |
A tax that is general and broad based for transactions that are only done at a State Level that vary from state to state. The Federal level doesn't do this sort of tax. |
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Use Tax |
A tax that exists to prevent tax reduction or tax avoiding purchases. It is value based and usually matches the general state tax on purchases. |
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Value Added Tax (VAT) |
A variation of a sales tax on the producer level, as it goes through different processes and gaining value, which the unpaid difference will need to be collected. |
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Main Source of US Revenue |
Income tax, followed by the FICA tax. |
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2 kinds of Employment Tax |
FICA & FUTA |
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FICA Tax |
Imposes a tax on self employed individuals, employees, and employers. It is also known as the federal insurance contribution act. |
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FUTA Tax |
Provides funds to the state unemployment benefit programs. Also known as the federal unemployment tax act. |
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2 components of FICA |
Social security (wage cap) & Medicare health insurance (no wage cap) payments. |
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Estate Tax |
A tax imposed on the transferor at death, for the property.
First $5 million typically is excluded, and this tax is on the federal level. |
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Inheritance Tax |
Taxes on the recipient of property from someone who passed away. |
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State taxes at death may have |
Either Inheritance tax or estate tax, not both. |
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Gift Taxes |
An excise tax levied on the right to transfer property.
The Fed tax of this is the same, or unified, as the federal estate tax. Has exclusion up to $14k per donation, per year. |
