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10 Cards in this Set
- Front
- Back
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Three ways that taxes affect the economy |
The affect resource allocation ,the behavior of consumers ,and the nation’s productivity and growth |
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Incidence of a tax |
The final burden of the tax who actually pays for it the most |
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How do you determine the incidence of a tax? (Who most bears the burden of a tax ) |
Incidence of the tax ( inDirect tax ) Depends on elasticity of demand. If the demand is elastic consumers easily shifting to other goods so the producer pays more of the tax if the demand is inelastic burden is shifted more to consumers |
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federal government revenue sources |
Taxes: Income tax, FICA, Excise tax, corporate income tax, estate tax ,customs duties and fees Fees and borrowing |
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History of the income tax |
First passed in 1861 by the union to find the Civil War repealed 1872. 16th amendment ratified in 1913 under Woodrow Wilson |
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2 Types of government spending |
Direct payments for goods and services , And transfer payments |
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Transfer payments |
Payments of government makes for which it receives no services or goods such as Social Security , welfare or Grants in aid |
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Impact of government spending on the economy |
Resource allocation guns or butter , distribution of income, production in the private sector, Tax burden on people |
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How much of GDP is government spending at all levels of government |
1/3 of gdp |
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Role of the federal government in the economy |
PPRC: provider, protector, regulator and consumer |
