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33 True/False questions

  1. progressivity________________ taxes reduce inequality

          

  2. marginal tax ratetaxes paid/
    taxable income

          

  3. in-kindWhich type of income is typically used in poverty or other welfare analyses?

          

  4. loopholesthe progressive tax rates apply to "taxable" income, not all income

          

  5. nominal tax ratethe tax rate imposed on the last dollar of income

          

  6. *represents a stock of potential purchasing power of goods/services; the market value of assets

          

  7. income sharethe proportion of total income received by a particular group

          

  8. regressive_______________ taxes increase inequality

          

  9. size distribution of incomeincome received before taxes

          

  10. horizontal equityprinciple that people with equal incomes should pay equal taxes

          

  11. regressive taxa tax system in which tax rates rise as incomes rise

          

  12. progressive_______________ taxes increase inequality

          

  13. gini coefficienta mathematical summary of inequality based on the Lorenz curve

          

  14. loopholespeople with high incomes avoid high taxes by claiming large exemptions and deductions

          

  15. disposal incomeincome received after taxes

          

  16. nominal tax ratethe taxes actually paid as a percentage of taxable income

          

  17. proportionalthe tax system as a whole is nearly

          

  18. personal incomeincome received before taxes

          

  19. equity concernsa graphic illustration of the cumulative size distribution of income; contracts complete equality with the actual distribution of income

          

  20. sales and property taxesregressive; w/ lower incomes tend to pay higher percent of their income on items subject to these taxes

          

  21. vertical equityprinciple that people with higher incomes should pay more taxes

          

  22. effective tax ratetaxes paid/
    total economic income

          

  23. lorenz curvea graphic illustration of the cumulative size distribution of income; contracts complete equality with the actual distribution of income

          

  24. sales taxesa single-rate tax system

          

  25. payroll taxesmajor source or revenue for state goverment

          

  26. efficient tax ratetaxes paid/
    total economic income

          

  27. in-kind incomegoods/services received directly without payment in a market transaction

          

  28. progressive taxa tax system in which tax rates rise as incomes rise

          

  29. wealthrepresents a stock of potential purchasing power of goods/services; the market value of assets

          

  30. flat taxrepresents a stock of potential purchasing power of goods/services; the market value of assets

          

  31. property taxesmost local governments rely on:

          

  32. market failuremajor source or revenue for state goverment

          

  33. tax elasticity of supplyprinciple that people with higher incomes should pay more taxes