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11 Cards in this Set

  • Front
  • Back
Government expenditures or outlays
Federal, state and local government outlays for goods and services, including transfer payments
Benefits-received principle
The concept that those who benefit from gov. expenditures should pay the taxes that finance their benefits
Ability-to-pay principle
the concept that those who have higher incomes can afford to pay a greater proportion of their income in taxes, regardless of benefits recieved
Progressive tax
a tax that charges a higher percentage of income as income rises
Average tax rate
The tax divided by the income
Marginal tax rate
The fraction of additional income paid in taxes
regressive tax
a tax that charges a lower percentage of income as income rises
Proprotional tax
a tax that charges the same percentage of income regardless of the size of income. Also called a flat-tax rate or simply a flat tax
Public choice theory
The analysis of the government's decision-making process for allocating resources
Benefit-cost analysis
The comparison of the additional rewards and costs of an economic alternative
Rational ignorance
The voter's choice to remain uninformed because the marginal cost of obtaining information is higher than the marginal benefit form knowing it