Economics Chapter 14: Taxes And Government Spending Answers – Flashcards
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Tax
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Required payment to local state, government, or national government
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Revenue
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Income received by a government from taxes and other non tax sources
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Progressive tax
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A tax for which the percentage of income paid in taxes increases as income increases
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Proportional tax
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Tax for which the percentage of income paid in taxes remains the same at all income levels
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Regressive tax
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Tax for which the percentage of income paid in taxes decreases as income increases
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Tax base
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The income, property, good, or service that is subject to a tax
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Individual income tax
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Tax based on persons earnings
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Corporate income tax
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Tax based on company's profits
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Property tax
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Tax based on real estate and other property
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Sales tax
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Tax based on goods or services that are sold
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Incidence of a tax
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Final burden of a tax
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Withholding
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Taking tax payments out of an employees pay before he or she receives it
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Tax return
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Form used to file income tax
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Taxable income
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Earnings on which tax must be paid; total income minus exemptions and deductions
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Personal exemption
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Set amount that taxpayers must subtract from their gross income for themselves, their spouse, and any dependents.
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Tax deduction
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Variable amount that taxpayers may subtract from there gross income.
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Tax credit
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Variable amount that taxpayers may subtract from the total amount of their income tax
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Estate tax
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Tax on the total value of money after a person has died
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Gift tax
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Tax on money or property one living person gives to another
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Tariff
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Tax on imported goods
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Tax incentive
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Use of taxation to discourage or encourage certain types of behavior
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Mandatory spending
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Spending that congress is required by existing law to do
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Discretionary spending
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Spending about which congress is free to make choice
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Entitlement
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Money people are entitled to from social welfare programs
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Budget
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Estimate of future revenue and expenses
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Operating budget
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Budget for day-to-day spending needs
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Capitol budget
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Budget for spending on major investments
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Balanced budget
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Budget in which revenue and spending are equal
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Tax exempt
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Not subject to taxes
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Real property
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Land and any permanent structures on the land to which a person has legal title
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Personal property
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Moveable possessions or assets
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Tax assessor
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Official who determines the value of property
