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)