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32 Cards in this Set
- Front
- Back
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TaxBase |
what is taxed (income, consumption, wealth,sales, etc.) |
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EffectiveTax Base |
includesany tax breaks, lack of inclusion, partial inclusion |
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RateStructure |
refersto marginal tax rate on another small increase in base |
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Deductions |
decreasetaxable income, and tax savings depend on marginal tax rate, mtr (Tax Savings =deductions * mtr) |
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TaxCredits |
decreasetax owing, granted at lowest marginal tax rate; non-refundable – can decreasetax to zero, refundable – can decrease tax to less than zero and get money back |
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CurrentCosts |
costsof inputs used to produce output in given time period |
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CapitalCosts span |
costsassociated with inputs used over longer period (depreciable capital, capitalcost allowance) |
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Source-BasedTaxation |
taxall capital income earned in Canada regardless of who earned it (highlysusceptible to capital flight if Canadian tax rates get out of line with thoseelsewhere; decreased capital in Canada will impose burden on factors that workwith capital -> labour production decrease) |
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Residence-BasedTaxation |
wheretax capital income of Canadian residents regardless of where in world is earned(because residence must change to avoid tax, less susceptible to capital flight– still flight but less than source-based) |
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Deficit |
whentaxes are less than spending |
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TaxMix |
abouthow reliant we are on each of major taxes for revenue (should balance betweenefficiency, equity, growth and administration) |
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ExciseTaxes |
on specificgoods (tobacco, alcohol, fuel), high tax rates justified as corrective tax(negative externality) |
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EconomicGrowth |
growthis fostered by accumulation of factors of production (physical capital, humancapital, technological change, innovation) |
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PAYGO |
payas you go; here current tax contributions mainly used to fund current benefitsbut is small pool of funds for investment (small impact on growth) |
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FullyFunded |
herecontributions by a tax accumulate in individual account and are savings so muchlarger impact on growth because much larger asset pool |
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Administration |
systemshould be transparent, easy to administer, with low costs |
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BenefitApproach |
paytaxes according to benefit received from government good or service |
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Abilityto Pay |
higherability to pay, pay more (progressive taxes that redistribute from richer topoorer) |
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VerticalEquity |
shouldtransfer from richer to poorer (progressive tax rates) |
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HorizontalEquity |
likeindividuals should be treated in like manner by tax system (families with sameincome pay equal taxes) |
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ComprehensiveIncome |
=sum of current consumption + change in net worth |
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Accrual |
taxon annual basis |
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Realization |
taxwhen asset is sold |
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FullIntegration |
meanswhat paid under CIT and PIT should be same as what paid under PIT alone (noCIT) |
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ConsumptionServices (base) |
includeall expenditure on non-durable goods plus flow of consumption services fromdurable goods (don’t include cost of asset, but include costs of servicing theasset over future years) |
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ExpenditureBase |
expenditureson durable and non-durable goods in year made on cash flow basis (include flatcost of asset) |
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Capital-IncomeExempt Base |
returnon capital income (savings) not taxed and no tax breaks for savings (I=C+S -> C=I-S, Base = Earnings + Transfers) |
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TaxFree Savings |
savingsout of after-tax income |
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StatutoryIncidence |
whomust legally provide tax to the government |
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EconomicIncidence |
measuringchanges in Price and Quantity induced because economic agents change behaviourin presence of tax |
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PartialEquilibrium |
incidenceof tax only in market where levied |
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GeneralEquilibrium |
incidenceof tax in all markets where has impact |
