Economics: Chapter 14 – Taxes & Government Spending

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Distribution of Income
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the way which income is allocated among families, individuals, or other groups
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Flat Tax
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everyone pays the same regardless of level of income
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Progressive tax
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Higher pay, higher tax
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Regressive tax
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tax where % of income in tax goes down as income rises
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Sin Tax
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a relatively high tax designed to raise revenue while reducing consumption of a socially undesirable product
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Marginal Tax Rate
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tax rate that applies to the next dollar of taxable income
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Fiscal Policy
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use of government spending and revenue collection measures to influence the economy
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Incidence of a tax
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term for final burden of the tax
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Tax loopholes
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exceptions or oversights in the tax law that allow taxpayers to avoid taxes
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International Revenue Service (IRS)
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the branch of the U.S. Treasury Department that collects taxes
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Sales Tax
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A general state or city tax levied on a product at the time of sale
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ability-to-pay rule
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“Those who benefit from government goods and services should pay in proportion to the amount of benefits receive.” So states the
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Progressive
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In discussing taxes, which is the opposite of regressive?
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Capital Gains Tax
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Which type of tax is levied on the sale of an asset held for 12 months or longer?
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A city water system
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Which is an example of a natural monopoly?

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