ECO 211 Chapter Notes - Chapter 10: Price Ceiling, Black Market, Only Time

• School: University of Miami
• Department: Economics
• Course: ECO 211
• Professor: Dr.Spigelman

Document Summary

Budget deficit--when tax revenues don"t cover government spending. Tax revenues/receipts--the money a government collects through tax. Payroll tax/social insurance tax--tax on the wages of workers. Corporate income tax--taxes paid by firms to the government from their profits. Excise/specific taxes--taxes paid when purchasing a specific good. Sales taxes--paid by the buyer, as a percentage of the sale price of an item. Main factors underlying government taxation & spending decisions: Financing operations, such as salaries of federal employees. Raise revenues for things like national defense, education, police, infrastructure. Transfer payments--occur when the government gives part of its tax revenue to some individual or group, such as elderly or poor. Progressive tax system--higher tax rates on those with higher incomes. Marginal tax rate--how much of the last dollar earned is paid out in tax. Proportional tax system--households pay the same percentage of their incomes in taxes regardless of their income level. Regressive tax system--lower tax rates on those earning higher incomes.