Economics - Chapter 14 Taxes

Revenue

• The belief that individuals should be taxed according to their ability to pay, regardless of the benefits they receive.
• The income generated from taxes, fees, or other sources by a government.
• An agreement passed by Congress to fund government agencies at existing, reduced, or expanded levels when a budget is not finalized.
• A tax that imposes a higher percentage rate on lower incomes than on higher incomes.

Expenditures

• The spending of government funds to provide public services.
• Specific funding appropriated by a legislature for a particular purpose.
• The belief that individuals should be taxed according to their ability to pay, regardless of the benefits they receive.
• A tax that imposes a higher percentage rate on lower incomes than on higher incomes.

Equity

• The principle of fairness in tax policy, meaning taxes should be impartial and just.
• Exceptions or oversights in tax law that allow some people or businesses to avoid paying taxes.
• A tax that imposes a higher percentage rate on lower incomes than on higher incomes.
• A tax that imposes the same percentage rate on everyone, regardless of income.

Simplicity

• The belief that individuals should be taxed according to their ability to pay, regardless of the benefits they receive.
• The criterion that tax laws should be easy to understand for both taxpayers and tax collectors.
• Expenses that can be subtracted from gross income to reduce taxable income.
• The effectiveness of a tax system in generating revenue without excessive costs and complications.

Efficiency

• The concept that those who benefit from government goods and services should pay in proportion to the benefits received.
• A tax that imposes a higher percentage rate on higher incomes than on lower ones.
• The belief that individuals should be taxed according to their ability to pay, regardless of the benefits they receive.
• The effectiveness of a tax system in generating revenue without excessive costs and complications.

Proportional Tax

• A tax that imposes the same percentage rate on everyone, regardless of income.
• A tax deducted from a worker's paycheck that funds social security and Medicare.
• The criterion that tax laws should be easy to understand for both taxpayers and tax collectors.
• A situation where expenditures exceed revenues, resulting in a negative balance.

Progressive Tax

• The spending of government funds to provide public services.
• A tax that imposes a higher percentage rate on higher incomes than on lower ones.
• A situation where expenditures exceed revenues, resulting in a negative balance.
• Expenses that can be subtracted from gross income to reduce taxable income.

Regressive Tax

• A tax that imposes a higher percentage rate on lower incomes than on higher incomes.
• The criterion that tax laws should be easy to understand for both taxpayers and tax collectors.
• The effectiveness of a tax system in generating revenue without excessive costs and complications.
• The spending of government funds to provide public services.

Benefit Principle

• The income generated from taxes, fees, or other sources by a government.
• An agreement passed by Congress to fund government agencies at existing, reduced, or expanded levels when a budget is not finalized.
• Funds collected by one level of government that are distributed to another level for expenditures.
• The concept that those who benefit from government goods and services should pay in proportion to the benefits received.

Ability-to-Pay Principle

• The total amount borrowed from investors to finance government deficit spending.
• Specific funding appropriated by a legislature for a particular purpose.
• Expenses that can be subtracted from gross income to reduce taxable income.
• The belief that individuals should be taxed according to their ability to pay, regardless of the benefits they receive.