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Preparation for the Exam 1 - Chapter 1 Tax tax payer...

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Chapter 1 Tax, tax payer, incidence and jurisdiction Relationship b/w tax rate, base and revenue Types of taxes levied by local, state and federal governments Application to Kazakhstan Jurisdictional competition for tax revenues Reasons why government modify tax system Primary sources of tax law USA RK
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Basics Tax Tax payer Tax incidence Tax jurisdiction
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Basics Tax rate Tax base Tax revenue What is the formula?
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Types of Taxes Transaction based Activity Based Earmarked
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Jurisdictions: USA
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Jurisdictions: Kazakhstan
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Chapter 2 Standards for a good tax: Efficiency Sufficiency Fairness Convenience Behavioral responses to rate changes Static Forecasting Dynamic Forecasting Income effect Substitution effect Vertical vs. Horizontal equity Income tax rate structures Proportional Progressive Regressive Marginal vs. Average tax rates
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Standards for a good tax Efficiency Sufficiency Fairness Convenience
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Behavioral responses to rate changes Static Forecasting Dynamic Forecasting Income effect Substitution effect Any examples???
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Fairness of taxes Vertical equity Horizontal equity
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Income tax rate structures Proportional Progressive Regressive
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Tax rates Marginal tax rate Average tax rate
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Problem 1 Custer County is considering raising revenues by imposing a $25 fee on couples who obtain a marriage license within the county. Does this fee meet the definition of a transaction-based tax?
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Solution: Problem 1 This payment more closely resembles a fee for a government service than a transaction-based tax because the transaction occurs between a private party and the jurisdiction itself, rather than between private parties engaging in a market transaction. The payment also entitles the payer to a specific benefit (the right to marry under law).
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Problem 2 A city government recently increased its local sales tax from 1 percent to 2 percent of the dollar value of consumer goods purchased in the city. However, the city's sales tax revenues increased by only 30 percent subsequent to the doubling of the tax rate.
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