ECON 200 Chapter Notes - Chapter 12: Regressive Tax, Tax Rate, Worshipful Company Of Tax Advisers
31 May 2016
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Chapter 12: the design of the tax system. Us federal gov"t collects about 2/3 of taxes in our economy. Largest source of revenue: individual income tax: i. i. t: Dividends from corporations in which it owns shares. Family tax liability (how much it owes) is based on total income. Tax income= total income amount based on # of dependents (kids) certain expenses deemed deductible (mortgage, charity, etc. ) Tax liability is calculated from taxable income using a schedule. Payroll tax: tax on wages that a firm pays its workers: social insurance taxes , used to pay for social security and medicare. Corporate income tax: gov"t taxes each corporation based on profit, =amount corporation receives for goods/services cost of producing goods/services. Budget deficit: an excess of gov"t spending over gov"t receipts. Budget surplus: an excess of gov"t receipts over gov"t spending. Efficient tax system: imposes small deadweight losses and small administrative burdens. Us federal tax code gives preferential treatment to investors in municipal bonds.
