Note_card-11.docx - Biren Patel Basic Macroeconomics Note...

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Biren PatelBasic MacroeconomicsNote cards – 111.Three principles of Taxation-Ability to pay principle-Benefits principle-Sin Tax principle2.Ability to pay principleIt is levied based on how much income a person or corporation makes.3.Benefits PrincipleIt is a tax levied based on how much benefit a person or corporation gets from item.4.Sin Tax PrincipleIt is a tax levied to discourage consumption.5.Basic economic maximIts states political considerations always win out over economic considerations.6.Three types of taxes-Income tax-Sales tax-Property tax7.Progressive taxIt is a tax where the marginal rate of tax increase as the base increase.

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