econ 5&6 notes

econ 5&6 notes - Chapter 5&6 Notes Free rider...

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Free rider problem-arises when some individuals take advantage of the fact that others will take on the burden of paying for things Merit goods-goods deemed socially desirable by the public Marginal tax rate-the tax rate on the last dollars earned Average tax rate-the proportion of total income paid in taxes Tax bracket-a specified level of taxable incole to which a specific and unique marginal tax rate is applied Marginal tax rate=change in taxes due/change in taxable income Proportional taxation-marginal tax rate=average tax rat Everyone pays the same percent of their income in taxes Progressive taxation-marginal tax rate>average tax rate As a person’s taxable income increases, the percentage paid in taxes increases Regressive taxation-marginal taxation<average tax rate As a person’s taxable income increases, the percentage of income paid in taxes decreases. Federal personal income tax accounts for 46% of all federal revenue
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This note was uploaded on 04/28/2008 for the course ECON 201 taught by Professor Dr.sharma during the Spring '08 term at Ohio State.

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econ 5&amp;6 notes - Chapter 5&amp;6 Notes Free rider...

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