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35 Cards in this Set
- Front
- Back
- 3rd side (hint)
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What is Tax?
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A required payment to a local, state or national government.
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How a government collects money needed to operate.
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What is Revenue?
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The income received by a government from taxes and nontax sources
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Needed by government to provide goods & services for its citizens (i.e., highways, national defense, educaton, & law enforcement)
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What is a Tax Base?
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Income, property, good, or service that is subject to tax.
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Includes a person's earnings as individual income tax.
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What is Individual Income Tax?
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A tax on a person's earnings
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the more one earns the more tax he/she pays
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What is Sales Tax?
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A tax on the dollar value of a good/service being sold
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sales tax is set as a % of the dollar by county (local) government (i.e., Stephens County is 7% on the dollar)
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What is Property Tax?
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A tax on the value of a property.
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Includes "Real Estate", land or building and personal property (jewelry, furniture & boats) and sometimes intangible property as bank accounts, stocks & bonds.
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What is a Tax Assessor?
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An official who determines the value of a property
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Uses fixed dollar amount per $1,000 of the assessed value to figure property tax
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What is Corporate Income Tax?
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A tax on the value of a company's profits
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Less than 10% of federal revenues in recent yrs.; difficult to assess due to their business deductions
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What is Proportional Tax?
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A tax for which the percentage of income paid in taxes remains the same for all income levels.
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Percentage of tax remains the same whether income goes up or down.
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What is a Progressive Tax?
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A tax for which the percentage of income paid in taxes increases as income increases.
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% income paid in taxes rises with amount of income earned
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What is a Regressive Tax?
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A tax for which the percentage of income paid in taxes decreases as income increases.
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Ex. Although, sales tax rate remains constant, a sales tax decreases due to higher-income households spending a lower proportion of their incomes on taxable goods & services. Proportionately lower income families pay more taxation based on their earnings.
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What is Incidence of a Tax?
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The final burden of a tax.
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ex. Producers can "pass on" the burden of taxation to its consumers if its goods are more inelastic (will be bought regardless of price)
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What is Withholding?
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Taking tax payments out of an employee's pay before he/she receives it.
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Based on an estimate of how much you will owe in federal income taxes for the entire year.
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What is a Tax Return?
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A form used to file income taxes.
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form used to declare your income to the government and figure out your taxable income
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What is Taxable Income?
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Income on which tax must be paid; total income minus exemptions and deductions.
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a person's gross / total income - exemptions & deductions. G.I. includes salaries, wages, tips, & concessions; also income from savings accounts & dividends from stocks
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What is a Personal Exemption?
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A set amount that you subtract from your gross income for yourself, your spouse, and any dependents.
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This amount subtracted from G.I. includes various deductions.
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What are Deductions?
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Variable amounts that you can subtract or deduct from your gross income (G.I.)
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Includes interest on mortgage, donations from charity, some medical expenses and state or local tax payments.
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What is FICA?
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Taxes that fund Social Security and Medicare.
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Federal Insurance Contributions Act taxation funds SS & Medicare programs
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What is Social Security?
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Old-Age, Survivors, and Disability Insurance (OASD)
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Federal Gov. established in 1935 to ease hardships of Great Depression. Payments shared by employees & employers
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What is Medicare?
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A national health insurance program that helps pay for health care for people over age 65 or with certain disbilities.
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Both employees & employers pay Medicare tax on all their earnings with no ceiling.
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What is Estate Tax?
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A tax on the estate, or total value of the money and property, of a person who has died.
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Tax paid out of estate before the heirs get their share; in 2004 if total vlue of estate is $1.5 million or less, there is no federal estate tax.
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What is a Gift Tax?
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A tax on money or property that one living person gives to another.(ex. a person can give up to $10,000 a yr. tax free to each of several different people).
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Goal of this tax est. in 1924, was to keep people from avoiding estate taxes by giving away their money before they died.
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What are Tariffs?
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A tax on imported goods. Intended to encourage purchase of domestic goods.
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taxes intended to protect American farmers and industries from foreign competitors rather than raise revenue.
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What are Tax Incentives?
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The use of taxation to encourage or discourage certain behavior.
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Ex."vice/sin" taxes on tobacco and alcohol products.
Also deductions on fuel efficient cars, & home improvements for energy conservation. |
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What is Mandatory Spending?
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Spending on certain programs that is mandated or required by existing law.
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Ex. Social Security & Medicare programs
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What is Discretionary Spending?
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Spending about which government planners can make choices.
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This type spending has decreased in comparison to Mandatory spending.
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What is Entitlement?
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Social welfare program that people are "entitled to" if they meet certain eligibility requirements.
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Ex. certain citizens are "entitled to" social welfare programs based on age & income level
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What is Medicaid?
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Entitlement program that benefits low-income families, some people with disabilities, and elderly people in nursing homes.
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largest source of benefits for low-income families; funded by taxes withheld from people's paychecks; serves 40M people >65yrs.
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What is an Operating Budget?
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Budget for day-to-day expenses.
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Include state employee salaries, supplies like computers/paper & maintainance of state facilities from state capital to roadside parks
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What is a Capital Budget?
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Budget for major capital or investment;expenditures.
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funds new buildings or construction projects by long-term borrowing or the sale of bonds.
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What is a Balanced Budget?
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Budget in which revenues are equal in spending.
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Laws require a ___ ___ in 49 states regarding the Operating(states) not Capital Budget.
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What is Tax Exempt?
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Not subject to taxes.
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Ex. non-profit organizations, religious groups, and charities
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What is Real Property?
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Physical property such as land or buildings.
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"Real Estate" taxes are levied by local governments
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What is Personal Property?
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Possessions such as jewelry, furniture or boats.
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taxes are levied by local governments on personal property
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What is a Tax Assessor?
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An elected official who determines the value of a property.
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This official figures property tax based on a fixed dollar amount per $1,000 of the assessed value. Main source of funding for schools.
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