week15-082 - Taxes and Income Distribution Present the US...

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1 Taxes and Income Distribution Present the US tax system including the principles of taxation that governments use to create tax policy. Understand the effect of price elasticity on tax incidence. The distribution of income in the United States, and income mobility. The Tax System The most widely used taxes are these: Individual income taxes. Social insurance taxes. Sales taxes. Property taxes. Excise taxes.
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2 Federal Spending 2003 State and Local Spending 2002 Education 34% Other 43% Public Welfare 16% Highways 7% The Tax System Progressive and Regressive Taxes Regressive tax A tax where people with lower incomes pay a higher percentage of their income in tax than do people with higher incomes. Progressive tax A tax where people with lower incomes pay a lower percentage of their income in tax than do people with higher incomes. Three Tax Systems Proportional Tax Regressive Tax Progressive Tax Income Amount of Tax Percent of Income Amount of Tax
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week15-082 - Taxes and Income Distribution Present the US...

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