п»їCh. 1

General purpose of taxes should be to fund gov't agencies

Unlike fines/penalties, taxes aren't meant to punish or prevent illegal behavior Sin taxes- to dissuade behaviors

Tax must be required, imposed by simply gov't (federal, state, local) and not attached directly to the power received by simply taxpayer Reserved tax-assessed pertaining to specific goal, because the pmt made by the taxpayer does not directly correspond with specific gain received by taxpayer Ex lover. Marge trips to APPROACH where she rents an accommodation and dines at a lot of restaurants. The cost she pays for her hotel room and foods includes an extra 2% city surcharge to fund road development in ING. This is a tax b/c the pmt is required by simply local gov't and won't directly correspond with specific benefit that Marge receives Tax= Tax Basic x Taxes Rate

Tax Base- defines precisely what is actually taxed. Tax Rate- level of taxation imposed Toned Tax- single tax used on entire baseGraduated tax- broken into series of brackets Marginal tax rate sama dengan (New Total Tax- Old Total Tax)

(New Taxable Income- Old)

Marginal may be the next added increment of taxable salary Average tax rate- taxpayer's avg degree of tax on each dollar of taxable cash flow Total Duty / Taxable Income

Successful tax rate- taxpayer's avg rate of taxation to each dollar of total income (taxable and non-taxable ) Provides better depiction of taxpayer's burden b/c it depicts the total tax paid as a proportion of the sum of equally taxable and nontaxable salary Total duty / Total Income

Proportional tax composition (flat tax)- imposes regular tax rate throughout foundation. Proportional duty = duty base times tax price Marginal taxes rate continues to be constant, often = normal tax price Progressive tax structure- imposes marginal duty rate since the tax base improves, marginal tax rate and taxes paid out increases. Regressive tax structure- decreasing limited tax level. Ex. DURE and joblessness taxes Because tax base increases, limited tax charge decreases when total taxes paid raises

National Taxes

Income tax- most significant duty, represents 60% of US duty revenue Accessed on individuals, corps, properties, trusts

Employment/Unemployment taxes

Second largest group. Consists of old age, survivors, and impairment insurance (OASDI) tax, OTHERWISE KNOWN AS Social Security tax and Medical Health Insurance taxes (medicare) Joblessness taxes fund temp unemployment benefits

Excise duty

Levied about quantity of goods sold

Transfer duty

Levied on reasonable market beliefs of prosperity transfers after death or perhaps by gift idea

Express and Local Income taxes

Sales and employ tax

Tax base intended for sales tax is definitely retail product sales of goods plus some services Taxes base for proper use tax can be retail selling price of goods owned or operated, possessed, or consumed w/m state that weren't purchased w/n state Home tax

Happen to be ad valorem taxes (tax base for every single is fair market value of property) Genuine property taxation consist of fees on land, structures, improvements permanently attached to land Personal property taxes incorporate taxes in all other types of real estate, intangible and tangible Income tax

Most express taxable profits calcs generally conform to the federal taxable income calcs Excise tax- states commonly impose bar taxes in items subject to federal bar tax Implied tax- (above taxes are explicit). Implicit are not directly paid to gov't. The reduced ahead of tax go back that a tax-favored asset produces b/c of its taxes advantaged position. Tax-favored: when the income the asset produces is either excluded from taxes base or perhaps subject to reduced rate. Tax benefits linked to tax-favored asset increase with regard to asset Analyzing Taxes- Sufficiency

Involves assessing the combination size of the tax acceleration that must be generated and ensuring that the taxes system supplies these earnings Static predicting ignores how taxpayers might alter all their activities reacting to a proposed tax rules change and bases expected tax earnings on existing state of transactions Powerful forecasting tries to account for possible taxpayer responses into a proposed...