Lecture 32 - Announcements MT3 Grades are posted e-mail me...

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Unformatted text preview: Announcements MT3 Grades are posted e-mail me with your ID # if you do not have a grade (but should) Two more topics taxes and trade Today-taxes (and maybe some trade) Monday trade and evals Weds trade and wrap-up Ch 19 HW AND Taxes HW due the last day of class The final is cumulative 80 questions. Last chance to check iClicker grades if you have a zero, let me know NOW! Taxes from Ch3 (p64) and Ch5 appendix (back of book). But a lot of this stuff is not in the book. 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 taxes25 percent of income, for example. TAXES I. Types of taxes II. Who pays? a) Basis of taxation b) The incidence of taxes III. The effect of taxes on behavior (distortion) I. TYPES OF TAXES Taxes on stocks Houses Cars Land Wealth Taxes on Flows Income (Wages) Sales (Consumption) Profits Payroll TYPES OF TAXES Taxes on Flows Taxes on Economic Flows TYPES OF TAXES Federal Government Receipts 19602005 (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). 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. INCOME TAXES Individual Income Tax Rates, 2005 MARRIED COUPLES FILING JOINTLY TAXABLE INCOME TAX RATE $0 - 14,600 10% $14,601 59,400 15% $59,401 119,950 25% $119,951 182,800 28% $182,801 326,450 33% More than $326,450 35% SINGLE TAXPAYERS TAXABLE INCOME TAX RATE $0 7,300 10% $7,301 29,700 15% $29,701 71,950 28% $71,951 150,150 33% $150,151 326,450 35% Source : The Internal Revenue Service. TYPES OF TAXES regressive tax A tax whose burden, expressed as a percentage of income, falls as income increases....
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This note was uploaded on 12/20/2011 for the course ECON 2005 taught by Professor Zirkle during the Fall '07 term at Virginia Tech.

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Lecture 32 - Announcements MT3 Grades are posted e-mail me...

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