Revenue/Spending Test
What are the sources of Federal Revenue?
1. Individual income tax 2. Payroll 3. Corporate
What are the 3 categories of Mandatory Federal Spending?
1. Social Security 2. Medicare 3. Medicaid
What is NOT an example of a commonly used proportional tax?
A state income tax
Proportion of your total income that is paid in taxes.
Average Tax Rate
A regressive tax takes a higher percentage of income from which kind of income group?
Lower income groups
Additional taxes paid on higher/different incomes; fraction of an additional dollar of income that is paid in taxes.
Marginal Tax Rate
Sum of all deficits and surpluses; grows when the government runs a deficit; shrinks when government run a surplus
National debt
A proportional tax would take a percentage of income from all groups except which?
People with no income
True or False: A flat tax can be considered regressive because it takes a greater portion of income from those in lower income groups.
True
True or False: A proportional income tax is a tax which all income levels are taxed at this rate.
True
True or False: A proportional income tax takes the same percentage of income from all income groups.
True
True or False: Sales taxes tend to be regressive because they take a larger percentage of the income of low-income taxpayers.
True
Transfer of money from one level of government to another.
Intergovernmental spending
A proportional tax is often referred to as ____ ___.
Flat tax
The specific percentage of the tax base that is paid in taxes
Tax Rate
Form completed to pay federal income tax
Tax Return
Give an example of Discretionary Federal Spending.
Defense
Revenues are less than expenditures.
Deficit
Benefit programs for people who meet eligibility requirements; falls under mandatory spending category.
Entitlement programs
Proportional taxes, at first glance, may appear to be _________.
Equitable
Variation on a sales tax that applies more narrowly to specific goods, such as gasoline
Excise tax
True or False: Flat taxes include fixed amounts of tax on each individual or household.
False
True or False: Our federal income tax is a proportional tax.
False
Plan for how the federal government will spend money in a particular fiscal year.
Federal Budget
A tax levied at 2 percent on the first $1,000 of income, 3 percent on the next $1,000, and so on is a ___________ tax.
Progressive
Which income tax structure is used in the United States?
Progressive
Required payment made by owners of things such as land, buildings, boats, and cars
Property Tax
A flat tax is the same as a ____________ tax.
Proportional
A tax that requires each person to pay 5 percent of income regardless of the level of income is a ____________ tax.
Proportional
A proportional tax may at first seem to be a fair form of taxation, but the effects are often __________.
Regressive
A tax levied at 18 percent on the first $1,000 of income, 15 percent on the next $1,000, and so on is a __________ tax.
Regressive
Collected by firms from consumers when they purchase a good or service
Sales tax
Many states use a proportion type of _____ _____ on merchandise.
Sales taxes
What is the largest Entitlement Program?
Social Security
Revenues are more than expenditures.
Surplus
How is revenue calculated?
price x quantity
How is profit calculated?
revenue - cost
How is cost calculated?
variable cost + fixed cost
