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25 Cards in this Set
- Front
- Back
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Tax |
a required payment to a local state, or national government. |
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Revenue |
money collected or received by a government for public use |
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Proportional Tax |
It takes the same percentage out of everyone's income |
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Progressive tax |
it takes a larger percentage out of the income of high-income people than of low income people |
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Regressive tax |
It takes a larger percentage of the income of high-income people than of low income people |
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Purposes of Taxation |
1. fund public goods and services 2. influence behavior 3. to stabilize the economy 4. redistribute income |
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income tax |
income that you earn weather from a job or other sources such as interest on savings accounts is subject to income tax. collected by the governmental IRS |
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sales tax |
in most states consumers pay sales tax on the value of the goods and services they buy. |
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Social security tax |
these taxes pay for the Social security programs. Social security taxes are based on wages earned and are withheld from paychecks. (FICA taxes) |
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excise tax |
a tax on the manufacture or sale of certain goods and services. (included in the price) |
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property tax |
most property taxes are based on the value of land and buildings owned. Property taxes are collected by state and local governments at rates that vary. |
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Estate and gift taxes |
Based on the value of a person's property after his/her death if the value exceeds a certain amount. |
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Business or license taxes |
fees to drive a car, own certain pets, hunt, fish. To be a doctor, lawyer, electrician and teacher license fees help pay for record keeping and other costs. |
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custom duties and tarriffs |
taxes on goods imported from other countries |
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benefit principle |
principle that holds those who benefit from a public service should pay for it.
(taxes on motor vehicles and gas are helped to maintain roads) |
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Ability-to-pay-principle |
more taxes should be paid by people who can aford to pay more |
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flat tax |
where that tax rate is the same for everyone |
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graduated tax |
different tax rates are applied to people with different incomes |
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1789 |
the constitution gives congress the power to levy taxes for the first time |
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1794 |
President George Washington orders troops to put down a rebellion by corn and rye farmers who oppose the whiskey tax because it cut their profits |
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1863 |
to finance the civil war, the federal government collects income taxes for the first time |
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1872 |
income tax ends |
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1895 |
an attempt to impose tax fails when the supreme court rules it unconstitutional |
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1913 |
The 16th amendment to the constitution allows the gov't to collect income taxes |
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1930 |
During and after the great depression, the government increases taxes to pay for social programs |
