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Unformatted text preview: First known tax was in Ancient Egypt around 3,000 BC Purposes: • Revenue • Redistribution • Alter behavior Nominal Gross Domestic Product (NGDP) measures the size of the economy Types of Taxes • Direct Tax – a tax upon an individual • Indirect Tax – a tax upon an activity • Personal Income Tax - % of income • Corporate Income Tax - % of profits • Sales Tax - % of purchase price • Property Tax - % of value of property • Capital Gains Tax – % of profits from sale of assets (gain from an investment) • Payroll Tax - % of income devoted to Social Security • Lump Sum Tax - $ per person or household (not a %) Calculating Taxes Paid: T = total taxes paid Y = income Average Tax Rate = T/Y Marginal Tax Rate = % of an additional dollar of income that is paid in taxes If you over tax people, then they don’t have enough income to participate in the economy....
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This note was uploaded on 09/29/2009 for the course ECON 101 taught by Professor Balaban during the Spring '07 term at UNC.
- Spring '07