Chapter 12 Paying for Government
Bond
A certificate stating that the government has borrowed a certain sum of money from the owner of the bond
Estate tax
A federal tax on all wealth a person leaves
Tax
A payment of money citizens and businesses must make to help pay the costs of government
Regressive
A sales tax is a what type of tax?
Property tax
A tax on value of the property owned by a person or by a business
Gift tax
A tax paid by anyone who receives a gift worth more than $10,000
Progressive tax
A type of tax that takes a larger percentage of income from higher income groups to low income groups
Regressive tax
A type of tax that takes a larger percentage of income from low income to high income
Exemptions
Amounts allowed to deduct, or subtract for each dependent
Sales tax
Collected on most products sold
Excise taxes
Collected only on services and goods, usually luxury items
Real property
Consists of Land, buildings, other structures
Personal property
Consists of stocks, bonds, jewelry, cars, and boats
Ability to pay
First principle of taxation
Convenient collection
Fourth principle of taxation
Surplus
Government collects more money than it spends
Balanced budget
Means its revenues equal its expenditures
Social Security tax
Money From this tax is used mainly to provide income to retired people and people with disabilities
Fine
Money charged as a penalty for breaking certain laws
Equal application
Second principle of taxation
Fees
Small payments
Inheritance tax
Tax based on the portion of the estate received by an individual
Tariff
Taxes on products imported from foreign countries
Income taxes
Taxes on the income that individuals and companies earn
Deductions
Taxpayers also are allowed to deduct certain expenses such as?
Taxable income
The amount on which individual income tax is paid
Revenue
The chief purpose of taxes is to raise money
Profit
The income a business has left after paying its expenses
Interest
The payment made for the use of the money
Easy payment
Third principle of taxation
National debt
Total amount of money owed by the U. S. Government, plus the interest that must be paid on this borrowed money
Deficit
When government spends more money than it collects