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16 Cards in this Set
- Front
- Back
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Capital gains tax
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tax taken on a households income, wage, salary...decreases their incentive to save
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IRA
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Individual Retirement Account that has tax advantages because income deposited into these accounts is not taxed until it is withdrawn at retirement and interest earned on the accounts is not taxed
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Consumption tax
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ONLY goods and services consumed are taxed
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Corporate profit tax
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tax on a companies profits...a decrease would make companies invest more so they get taxed less from their incomes
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investment tax credit
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decrease taxes on a company's investments
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Governments budget deficit
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spending > tax revenues
t-g<0 Gov. gets money by issuing bonds decreases household saving |
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Governments budget surplus
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tax revenues > spending
t-g>0 gov. pays back bond holders increases household saving |
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How the capital gains tax shifts the supply curve
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an increase in this tax will shift to the left b/c households want to save less
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How IRA requirements shifts the supply curve
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lessening the restrictions causes a shift to the right b/c households want to save
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how income tax rate shifts the supply curve
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decreasing this tax will shift to the right b/c households want to save
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the affect on supply curve of switching to only consumption tax
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households have more income and only get taxed on what they consume so they want to save more which shifts to the right
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How the governments budget surplus affects supply curve
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shifts to right b/c households have money paid back to them
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how the governments budget deficit affects supply curve
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shifts to left b/c households have less money from buying gov. bonds
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how the corporate profit tax affects the demand curve
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decrease on profit tax shifts demand curve to right b/c firms want to invest (need to borrow)
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how the investment tax credit affects the demand curve
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decrease on investment tax makes firms need to demand loans...shifts curve to right
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"crowding out"
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the government's needs to borrow takes away from firm's and household's money to invest
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