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12 Cards in this Set
- Front
- Back
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Budget surplus
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An excess of tax revenue over government spending
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Budget deficit
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A shortfall of tax revenue from government spending
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Average tax rate
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Total taxes paid divided by total income
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Benefits principle
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The idea that people should pay taxes based on the benefits they receive from government services
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Ability-to-pay principle
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The idea that taxes should be levied on a person according to how well that person can shoulder the burden
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Marginal tax rate
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The extra taxes paid on an additional dollar of income
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Lump-sum tax
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A tax that is the same amount for every person
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Horizontal equity
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The idea that taxpayers with similar abilities to pay taxes should pay the same amount
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Proportional tax
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A tax for which high-income and low-income taxpayers pay the same fraction of income
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Regressive tax
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A tax for which high-income taxpayers pay a smaller fraction of their income than do low-income taxpayers
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Progressive tax
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A tax for which high-income taxpayers pay a larger fraction of their income than do low-income taxpayers
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Vertical equity
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The idea that taxpayers with a greater ability to pay taxes should pay larger amounts
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