POLS 207 Lecture 21: Taxation
2 Dec 2016
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Document Summary
The federal government spends approximately 3. 5 trillion dollars through discretionary and mandatory spending. State and local governments, on the other hand, spend roughly 1. 6 trillion dollars with their money going to: education, health, public safety, and state trusts. Federal grants, etc; the dependency on federal money varies. States mix and match their sources of taxes: income tax, sales tax, property tax and severance taxes. Tax rate is a base rate at which something is taxed. Effective tax rate is defined as the tax rate after deductions, exemptions, etc. Tax burden is the percentage of income or total revenue that is paid in taxes. Types of taxes by incidence: progressive: higher income groups have to pay a larger share of taxes a. The federal government and most states have income tax except for texas. Tax base: personal or corporate incomes are subject to taxation, however, may be way lower than the total made income. Can be lowered by deductions, exemptions, etc.
