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130 Cards in this Set
- Front
- Back
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how many levels of government are involved in the methods of taxation? what are they?
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four
1) local govt 2) regional entities 3) state govt 4) federal govt |
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what is the basic formula for determining tax revenue?
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base X rate = tax revenue
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what are three ways that the tax base measured?
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1) ad valorem (by value)
2) per unit 3) by class |
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is personal property tax measured by value, unit or class?
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value (of the house)
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is alcohol and tobacco tax measured by value, unit or class?
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unit (per bottle or pack)
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is personal income tax measured by value, unit or class?
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class (by individual or corporation)
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what is an exclusion from the base called?
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exemption
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what is a reduction in the base, subject to some specific criteria?
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deduction
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what is a credit against tax liability called?
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credit
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what are the three ways of reducing tax base or tax liability?
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1) exemption
2) deduction 3) credit |
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how is the <b>gross base</b> calculated in property tax?
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(base) - (exemptions) = gross base
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how is the <b>adjusted base</b> calculated in property tax?
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(gross base) - (deductions) = adjusted base
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how is the <b>revenue liability</b> calculated in property tax?
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(adjusted base) - (tax rate) = revenue liability
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how is <b>adjusted revenue liability</b> calculated in property tax?
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(revenue liability) - (credits) = adjusted revenue liability
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what is the different aspects of a revenue system called?
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revenue structure
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in a revenue structure, what is actually owed?
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adjusted revenue liability
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what is not paying taxes, or paying late?
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delinquency
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what is the cost to get others to comply with paying their taxes?
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compliance costs
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what is a progressive tax?
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tax rate increases as the amount being taxed increases
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what is a regressive tax?
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tax rate decreases as the amount being taxed increases
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what is a proportional tax?
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tax rate remains fixed no matter the amount being taxed
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what is progressivity?
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higher income taxpayers pay higher rates than lower income taxpayers
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what is regressivity?
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lower income taxpayers pay higher rates of taxes than higher income taxpayers
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what is elasticity?
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rate of change in revenue compared to general economic activity
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what might a government do to reach tax stability?
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have a broad tax base
have a low tax rate |
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what is revenue that is not collected because of a policy choice?
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tax expenditure
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what are the behavioral effects of taxes?
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non-neutralities
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what are revenues dedicated to a specific purpose?
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earmarked revenues
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what are the three types of state and local govt taxation?
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1) income
2) sales 3) property |
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what are the seven categories of federal taxes?
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1) income
2) property 3) consumption 4) corporation 5) payroll 6) capital gains 7) inheritance |
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what are the four R's of taxation?
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1) revenue
2) redistribution 3) repricing 4) representation |
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of the four R's, which is involved with externalities?
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repricing
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of the four R's, which is involved with transferring wealth?
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redistribution
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of the four R's, which is involved with raising money?
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revenue
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of the four R's, "no taxation without ______"
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representation
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what tax may be adjusted to individual characteristics of the taxpayer?
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income tax
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what tax is levied on transactions irrespective of the circumstances of the buyer or seller?
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sales tax
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list three questions that <b>tax incidence</b> involves
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1) who ultimately pays the tax?
2) does it get passed on? 3) does the effect go back to the producer? |
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what is it called when similar people are treated in the same way?
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horizontal equity
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what is it called when the higher-income people pay a larger share of income in tax?
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vertical equity
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what is the most unpopular tax?
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property tax
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why is property tax so unpopular?
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1) tax is direct
2) tax is on largest asset 3) tax is on unrealized gain 4) hard to see relationship 5) little choice 6) easy political target |
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in regards to property tax, why is reappraisal unpopular?
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creates uncertainty
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in regards to property tax, why are lump-sum payments unpopular?
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often large annual payments
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how much revenue did property tax create for local governments in 2007?
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$370 billion
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what are 8 reasons the property tax survives?
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1) high revenue
2) indirect business portion 3) low compliance cost 4) stable revenue 5) autonomous 6) difficult to evade 7) visible 8) capture value of public investment |
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what is the correspondence principle?
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area burdened by tax and area benefiting from tax mostly overlap
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what is a trend in property taxes for the residential tax base?
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45% residential reduction
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what is a trend in property taxes for non-profits?
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amount of charity higher than amount of foregone tax
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in regards to property tax, what is the concern about burden?
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rate issue <em>versus</em> base issue
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how is a base valuation made?
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willing buyer and willing seller test
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what is the key issue of base valuation?
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highest and best use of property
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what is the appraised value?
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amount the property would sell for in a normal transaction
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what is the assessed value?
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value for taxation purposes
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what is the assessment ratio?
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(Assessed Value) / (Appraised Value)
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what is the benefit of mass appraisal?
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accuracy with low cost
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what is the BOE? what does it do?
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board of equalization
can adjust appraisal values |
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how is tax revenue calculated?
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(tax rate) X (assessed value) = tax revenue
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how is the effective tax rate calculated?
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(tax revenue) / (market value) = effective tax rate
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what is owership of property thought to be related to?
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income
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what are some ways to relieve the property tax burden?
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1) reduce expenditures
2) green belt 3) circuit-breaker mechanism 4) replace w/ other revenue sources |
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where can you publicly comment on base valuation for property tax?
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BOE
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where can you publicly comment on rate setting for property tax?
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public hearing
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where can you appeal a given base valuation of property tax?
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county
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where can you appeal the rate setting for property tax?
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taxing entity
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what did California's Proposition #13 do in summary?
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new owner not equal to old owner; caps on assessed property
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what are the two things that Utah did in regards to property tax?
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1) Truth in Taxation
2) Certified Tax Rate |
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how often is a certified property tax rate calculated?
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each year
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what is a certified property tax rate?
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if valuation increases, rate decreases so the revenue stays the same
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where do most property tax dollars go?
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school districts
(city gets sliver) |
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what is an example of a consumption tax?
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sales tax
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what is a consumption tax often thought to encourage?
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savings
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what does sales tax tend to lower?
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property tax burden
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how many states have a general sales tax?
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45
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how much revenue did sales tax create for state governments in 2008?
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$1.9 billion
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how much revenue did sales tax create for local governments in 2008?
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$470 million
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what is "blood money"?
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aluminum chips to pay fraction taxes
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what does annexation mean?
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???
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why would a city care about annexation?
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???
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what is a "use" tax?
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tax on internet purchases
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why is "use" tax different?
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focuses on point of delivery, not point of sale
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what governments generally have an income tax?
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1) federal
2) state |
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how many states have local (city) income tax?
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6
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is income tax seen as progressive or regressive?
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progressive
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what form do you use for filing a basic income tax?
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federal 1040
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what is AGI?
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adjusted gross income
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how is <b>AGI</b> calculated for income tax?
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(gross income) - (adjustments) = AGI
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how is <b>taxable income</b> calculated for income tax?
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(AGI) - (deductions + exemptions) = taxable income
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how is <b>tax liability</b> calculated for income tax?
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(taxable income) X (tax rate) = tax liability
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how is <b>tax due</b> calculated for income tax?
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(tax liability) - (tax credits) = tax due
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how much revenue did income tax create for Utah in 2008?
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$2.6 billion
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what is a "fair tax"?
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flat 5% sales tax on all consumer goods
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what is a user charge?
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charge for access to a service
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what type of tax is a user charge?
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benefit tax
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have user fees increased or decreased in the last 20 years?
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increased
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are user charges the same for a long time?
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no, they should be reviewed frequently
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what are six advantages of user charges?
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1) reduces waste
2) shows level of service 3) equitable 4) improves productivity 5) market-based alternative 6) pricing influences behavior |
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when a government charges for a service, what four key issues should be addressed?
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1) more equitable as fee or tax?
2) what do others do? 3) how do others feel? 4) what effect will fee have? |
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what are five obstacles to user charges?
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1) it's new
2) saves little tax 3) complicated 4) antiquated 5) staff resistance |
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what are excise taxes?
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selective sales taxes
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what are two reasons to impose an excise tax?
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1) recover part of cost of public service from people who benefit
2) discourage consumption |
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how is an excise tax measured?
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sumptuary (per unit)
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what are some examples of an excise tax?
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1) transaction privilege tax
2) motor fuel tax 3) beer tax 4) cigarette/tobacco tax |
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what is a transaction privilege tax?
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generally % of gross receipts
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what are six influences in the pricing of an excise tax?
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1) recover costs
2) make $$$ 3) invest 4) influence 5) efficiency 6) equity |
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<b>important:</b> what are four ways you pick a price for an excise tax?
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1) arbitrary
2) competitive 3) market 4) cost-recovery |
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when establishing pricing in an excise tax, what are the three forms of cost?
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1) fixed costs
2) variable costs 3) contingency costs |
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when establishing pricing in an excise tax, once you've established your cost, how do you establish your <b>price</b>?
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(costs) / (#units sold) = price to charge per unit
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what is sensitivity to changes in pricing?
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price elasticity of demand; if price changes a little, demand will change a lot
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what is the largest source of revenue for nonprofits? what percent?
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fees and charges for services
60% |
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how much ($) is currently available in grants?
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over $13 billion
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how many steps are usually in a grant application?
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6 steps
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what are the six steps in the grant-writing process?
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1) idea
2) discovery + contact 3) prepare proposal 4) submit proposal 5) grantmaker responds 6) administer / start over |
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what are four ways that grantmakers respond to grant proposals?
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1) full award
2) partial award 3) defer consideration 4) deny request |
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what are five benefits from volunteers?
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1) more labor
2) more skills 3) more advocacy 4) better understand needs 5) humanize the experience |
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what is "the principle or practice of unselfish concern for or devotion to the welfare of others"?
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altruism
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who said, "He that does good to another, does good also to himself, not only in the consequences but in the very act; for the consciousness of well-doing is, in itself, ample reward"
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Seneca, Roman Philosopher
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what else is required, besides altruism, to garner volunteers?
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1) social interaction
2) affiliation 3) belonging 4) growth |
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which "volunteer experience" is the most important?
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the first
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how do you protect against liability concerns with volunteers?
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insurance
training |
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what are four organization capacities to support volunteers?
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1) training
2) supervision 3) support 4) recognition |
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what is a good/service that is both excludable and rival?
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pure private good
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what is a good/service that is both non-excludable and rival?
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common pool good
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what is a good/service that is both excludable and non-rival?
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toll good
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what is a good/service that is both non-excludable and non-rival?
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pure public good
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what are the two elements of service delivery?
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1) production
2) provision |
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why do governments exist? (four reasons)
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1) respond to market failure
2) stabilize the economy 3) distribute wealth 4) allocate resources |
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what is the underlying philosophy of privatization?
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"private sector is a better solution"
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why is privatization seen as an alternative to govt? (2 arguments)
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1) political arguments
2) efficiency arguments |
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how is privatization funded?
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1) grants (to subsidize agencies)
2) vouchers (to individuals) |
