Lecture 32b - Announcement s M T3 gr ades ar e on BB Final...

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Announcements MT3 grades are on BB Final HW due Wednesday The final is cumulative. There will be some “repeat” questions. There will be a “final review” – For 10:10 it will be on the 11 th at 3pm in McBryde 100. For 9:05 - TBD If you need special accommodations for the final, please make arrangements NOW! 1 of 35
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2 of 35 Taxes from Ch3 (p64) and Ch5 appendix (p120). But a lot of this stuff is not in the book.
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3 of 35 THE ECONOMICS OF TAXATION tax base The measure or value upon which a tax is levied. TAXES: BASIC CONCEPTS tax rate structure The percentage of a tax base that must be paid in taxes—25 percent of income, for example.
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TAXES Types of taxes The incidence of taxes The effect of taxes on behavior (distortion) 4 of 35
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TYPES OF TAXES Taxes on stocks Houses Cars Land WEALTH Taxes on Flows Income (Wages) Sales (Consumption) Profits Payroll 5 of 35
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6 of 35 TYPES OF TAXES Taxes on Flows Taxes on Economic “Flows”
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7 of 35 TYPES OF TAXES Federal Government Receipts 1960–2005 (billions of dollars) Individual Income Tax Corporation Income Tax Social Insur. Payroll Taxes Excise Taxes Other Receipts Total 1960 40.7 21.5 14.7 11.7 3.9 92.5 % 44.0 23.2 15.9 12.6 4.2 100 1970 90.4 32.8 44.4 15.7 9.5 192.8 % 46.9 17.0 23.0 8.1 4.9 100 1980 244.1 64.6 157.8 24.3 26.3 517.1 % 47.2 12.5 30.1 4.7 5.1 100 1990 466.9 93.5 380.0 35.3 56.2 1,032.0 % 45.2 9.1 36.8 3.4 5.4 100 2005* 893.7 226.5 773.7 74.0 84.8 2053.0 % 43.5 11.0 37.7 3.6 4.1 100 * OMB estimate Source: United States, Office of Management and Budget. Percentages may not add to 100 due to rounding. Note: most sales taxes are levied on a state level. Some states have no sales tax (Delaware).
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TYPES OF TAXES Proportional, Progressive, and Regressive Taxes proportional tax A tax whose burden is the same proportion of income for all households. The social security tax is proportional. progressive tax A tax whose burden, expressed as a percentage of income, increases as income increases. Other income tax is progressive.
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Lecture 32b - Announcement s M T3 gr ades ar e on BB Final...

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