Free Economics Flashcards about 12 ECON Vocab 9

12 ECON Vocab 9

study material for Vocab CH 9 Economics – Ponder

Term Definition
payroll withholding system system requiring employers to deduct income taxes from employees' paychecks and send it directly to the government
sin tax relatively high tax on socially undesirable products, such as tobacco
property tax tax on tangible and intangible possessions, such as real estate, buildings, furniture, stocks, bonds, and bank accounts
individual income tax tax on people's earnings
indexing upward revision of the tax brackets to compensate for the effects of inflation
investment tax credit reduction in business taxes based on investment in new plants and equipment
payroll taxes Medicare and FICA
progressive tax tax that imposes a higher percentage rate of taxation on people with higher incomes than on people with lower incomes
capital gains profits from the sale of an asset held for 12 months
excise tax tax on the manufacture and sale of selected items
tax loophole exceptions in the tax law that allow some people to avoid paying taxes
Medicare federal health care program for senior citizens
Surcharge additional tax above and beyond the base rate
proportional tax tax in which everyone pays the same percentage regardless of income
corporate income tax tax paid by corporations on their income
Federal Insurance Contributions Act (FICA) tax levied on both employer and employees to pay for Social Security and medicare

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