Economic Taxation Concepts and Principles

Front

A tax for which the percentage of income paid in taxes increases as income increases

Back

progressive tax

Front

A tax for which the percentage of income paid in taxes decreases as income increases

Back

regressive tax

Front

sales tax levied on retail sellers and added to the price of goods or services at the point of sale

Back

indirect tax

Front

economic philosophy of classical economists like Adam Smith

Back

laissez-faire, self-regulating

Front

How does the federal government manage the economy through fiscal policy?

Back

by taxing and spending

Front

An increase in government purchases of goods and services, a decrease in net taxes, or some combination of the two for the purpose of increasing aggregate demand and expanding real output

Back

expansionary fiscal policy

Front

Why would a decrease in net taxes promote economic growth?

Back

Consumers would have more money available to spend on goods and services.

Front

Automatic stabilizers like Social Security are an example of government fiscal policy. Why would it be wrong to cut Social Security?

Back

It provides income security to recipients. By smoothing fluctuations in disposable income, automatic stabilizers also smooth fluctuations in consumption and aggregate demand.

Front

social welfare programs that people are entitled to if they meet certain eligibility requirements

Back

entitlements

Front

a form of demand-side economics that encourages government action to increase or decrease demand and output to help the economy

Back

Keynesian economics