tax

FICA

Federal Insurance Contributions Act tax- levied on employers and employees equally to pay for Social Security and Medicare

user free

a charge levied for the use of a good or service

customs duty

a charge levied on goods brought into the US from other countries

medicare

a federal health-care program available to all senior citizens, regardless of income

sales tax

a general tax levied on most consumer purchases

sin tax

a relatively high tax designed to raise revenue while reducing consumption of a socially undesirable product such as liquor or tobacco

payroll withholding system

a sys. that requires an employer to automatically deduct income taxes from a worker's paycheck and send them directly to the IRS

regressive tax

a tax imposed a higher percentage rate of taxation on low incomes than on hight incomes

progressive tax

a tax imposed on higher percentage rate of taxation on higher incomes than lower ones

property tax

a tax on tangible and intangible possessions

excise tax

a tax on the manufacture or sale of selected items such as gasoline and liquor

gift tax

a tax on the transfer of money or wealth and is paid by the person who makes the gift

tax return

an annual report to the IRS summarizing total income, deductions, and taxes withheld

indexing

an upward revision of the tax brackets to keep workers from paying more in taxes just bc of inflation

payroll taxes

deducted from paychecks

accelerated depreciation

earlier and larger depreciation charges

tax loophole

exceptions or oversights in the tax law that allow some people and businesses to avoid paying taxes

incident of a tax

final burden of the tax

intergovernmental revenue

funds collected by one level of government that are distributed to another level of government for expenditures

proportional tax

imposes the same percentage rate of taxation on everyone, regardless of income

benefit principle of taxation

states that those who benefit from government goods and services should pay in proportion to the amount of benefits they receive (gas/roads)

estate/inherit tax

tax on the transfer of property when a person dies

ability-to-pay principle of taxation

the belief that people should be taxed according to their ability to pay, regardless of the benefits they receive

individual income tax

the federal tax on people's earnings-is a prime example of a complex tax

tax assessor

the person who assigns value to property for tax purposes

payroll withholding statement

the stub attached to a paycheck that summarizes income, tax withholdings and other deductions

corporate income taxes

the tax a corporation pays on its profits

marginal tax rate

the tax rate that applies to the next dollar of taxable income

average tax rate

total tax paid divided by the total taxable income(percentage tax rate is constant)