Chapter 6 Taxes - Chapter 6 Taxes, Transfers, and Public...

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Chapter 6 Taxes, Transfers, and Public Spending - Taxation from the government’s point of view o Taxation allows the governement to budget Three uses of tax revenue Spend it on needed goods and supplies Transfer it to those who need assistance Repay previously borrowed money Tax rates of Tax revenues Revenues from taxation are greater than revenue from user changes o Tax Base- to collect a tax government must establish a tax base The value of goods and services or wealth that is being taxed o Ad valorem taxation- assessing taxes by changing a tax rate equal to a fraction of the market price of each unit purchased (sales tax). Tax is a proportion of the unit purchased o Income tax- assessing taxes by changing a tax rate equal to a fraction off the income of the workers. Federal Government uses a graduated income tax rate. o Static Tax analysis- Assumes if raise raxes and the tax base (goods and supplies taxed) remain at same level. Raise taxes- increase in the tax revenue
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This note was uploaded on 05/17/2010 for the course BIO 111 taught by Professor Osikanlu during the Spring '09 term at Moraine Valley Community College.

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Chapter 6 Taxes - Chapter 6 Taxes, Transfers, and Public...

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