Chapter 12

What source of government revenue best illustrates the benefits-received approach to tax equity?

A driver deposits coins in a parking meter

What is a progressive tax? What are examples?

A tax that takes a larger share of income as income increases. Ex- luxury tax

When federal expenditures exceed federal tax revenues, how does the government fund the deficit?

By borrowing money through the sales of bonds

When a tax becomes a disincentive to work, the resulting reduction in productivity is a form of what kind of loss?

Deadweight loss

What question measures the efficiency of a tax system?

How much of the tax gets into the public treasury?

Which taxes are leading sources of revenue for the federal government?

Individual income taxes

Most sales taxes are regressive, for what reason?

Poorer taxpayers spend a larger portion of their income on taxable goods and services than do wealthier taxpayers.

How do state and local governments typically generate revenue to pay for education, law enforcement, and fire protection services?

Property and sales taxes

To calculate the amount of tax due, multiply the tax base by the tax what?

Rate

The Internal Revenue Service routinely collects taxes from employees through a system of what?

Withholding