What are taxes?

Progressive tax.

A higher percentage rate of taxation on high-income people than low-income earners

Customs duty.

A tax on goods imported into the United States

Estates tax.

A tax on property (assets) transferred to others on the death of the owner

Individual income tax.

Based on an individual's income from all sources (wages, interest, dividends, tips, etc.)

Criteria for Taxation:

Equity, Simplicity, Efficiency

Simplicity.

How easy it is for the taxpayer to understand and how easy it is for the government to collect

Efficiency.

How well the tax achieves the goal of raising revenue for the government with the least cost in terms of administration

Social Security.

Is a federal program to aid older citizens, children who have lost a parent, and the disabled

Tax Base.

Is a form of wealth that is subject to taxes

Tax return.

Is a form used to report income and taxes owed to government

Tax

Is a mandatory payment to a government.

Medicare.

Is a national health insurance program mainly for citizens over 65

Gift tax.

Is a tax on assets given by one living person to another

Excise tax.

Is a tax on the production or sale of a specific good or service

Corporate income tax.

Is based on a corporation's profits

Property tax.

Is based on the value of an individual's or a business's assets

Sales tax.

Is based on the value of goods or services at the time of sale

Revenue.

Is government income from taxes and other sources.

User fee.

Is money charged for the use of a good or service

Withholding.

Is money taken from pay before the worker receives it

Ability-to-Pay Principles.

People should be taxed on their ability to pay, no matter the level of benefits they receive.

Benefits.

People who benefit directly from public goods should pay for them in proportion to the amount of benefits received.

Unemployment Taxes.

Provides benefits for a certain period of time to employees who lose their jobs through no fault of their own

Equity.

Requires that people in similar situations pay a similar amount of taxes

Regressive tax.

Takes a larger percentage of income taxes from low-income people than from high-income earners

Proportional tax.

Takes the same percentage of income from all taxpayers

FICA.

The Federal Insurance Contributions Act

Taxable income.

The portion of income subject to taxation

Individual Income Taxes:

Withholding, Taxable income, Tax returnsWithholding