Term
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Definition
| losses in tax revenues attributable to tax preferences |
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Term
| Alternative Minimum Tax (AMT) |
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Definition
| a shadow tax rate structure applied to taxpayers who have significant amounts of certain tax preferences |
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Term
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Definition
| sum of annual expenditures and delta of net worth |
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Term
| for an income statement, sources equal... |
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Definition
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Term
| on an income statement, uses equal... |
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Definition
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Term
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Definition
| earnings from sale of productive services, transfer payments, capital gains or losses |
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Term
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Definition
| consumption, taxes, donations, gifts, savings (increases in net worth) |
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Term
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Definition
| the value of a person's assets held at any point in time, less the value of their liabilities |
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Term
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Definition
| increases in the value of assets over the accounting period |
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Term
| when to realized capital gains happen? |
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Definition
| when assets are sold for cash or exchanged for other assets |
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Term
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Definition
| increases in the value of assets in a given year that accrue on assets that are not sold for cash or exchanged for other assets. |
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Term
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Definition
| capital gains minus capital losses |
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Term
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Definition
| income in the form of goods and services rather than cash payments |
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Term
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Definition
| satisfaction that individuals receive from their employment that is not reflected in their wages |
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Term
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Definition
| based on a certain percentage of expense incurred, credits received by taxpayers. amount of credit is fixed for all taxpayers - eligibility is not |
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Term
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Definition
| general income tax system, same percentage for everyone. would have undesirable distributive effects and lowest income would prob have to be exempted |
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Term
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Definition
| a business that is legally established under state laws that grant it an identity separate from that of its owners |
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Term
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Definition
| liability for debts incurred by the corporation, attributable to stockholders in proportion to the amount of money they have invested in the corporation |
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Term
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Definition
| all business receipts over a year minus all business costs |
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Term
| equity (of a corporation) |
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Definition
| difference between the value of a corporation's assets and the value of its outstanding debt |
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Term
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Definition
| the portion of a corporation's profits paid out to its stockholders |
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Term
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Definition
| the portion of a corporation's profit retained by the corporation, not paid out to stockholders as dividends |
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Term
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Definition
| the decrease in the market value of durable physical capital used by firms in the productive process as that capital is "used up." |
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Term
| capital consumption allowance |
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Definition
| another name for economic depriciation |
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Term
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Definition
| allows a firm to deduct more than the actual economic depreciation from its income each year |
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Term
| expensing a capital asset |
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Definition
| deducting the full purchase price of an asset in the year of its acquisition |
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Term
| straight-line depreciation |
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Definition
| deduction of the same fraction of the cost of an asset each year over its useful economic life |
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Term
| if a firm can depreciate its capital expenditures quickly and write off a greater proportion of the expenditures in earlier years of use, its after-tax income . . . |
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Definition
| will increase (assuming flat-rate tax) |
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Term
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Definition
| the acquisition price of an asset |
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Term
| what does inflation do to the replacement cost of capital assets? |
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Definition
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Term
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Definition
| value added tax - a general tax on consumption levied on the value added to intermediate products by businesses at each stage of production. |
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Term
| comprehensive consumption |
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Definition
| annual comprehensive income minus annual savings |
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Term
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Definition
| taxing on purchases instead of income - an alternative to income taxes |
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Term
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Definition
| direct tax on consumption, requiring annual declaration of consumption expenditures, annual returns, calculation of expenditure and taxation of it |
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Term
| what would notably be excluded from expenditure tax? |
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Definition
| savings - until they are withdrawn and used for consumption |
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Term
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Definition
| an ad valorem levy of a fixed percentage on the dollar value of retail purchases made by consumers |
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Term
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Definition
| selective taxes levied on certain types of consumption activities |
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Term
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Definition
| multistage sales taxes levied at some fixed rate on transactions at all levels of production |
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Term
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Definition
| revenue, incentive to vertical integration among firms to reduce the number of production stages and interfirm transactions and reduce tax liability |
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Term
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Definition
| the market value of accumulated assets in a nation |
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Term
| real estate or real property |
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Definition
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Term
| wealth of a nation can be measured by... |
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Definition
| determining the net value of financial assets, capital assets, and land owned by citizens of a nation. |
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Term
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Definition
| a variable with a value defined at a particular point in time |
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Term
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Definition
| the valuation of taxable wealth by government authorities |
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Term
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Definition
| a tax levied on all forms of capital and land at a flat rate |
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Term
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Definition
| combination of government activities producing a distinguishing output |
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Term
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Definition
| a system of managing government expenditures by attempting to compare the program proposals of all government agencies authorized to achieve similar objectives |
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Term
| mission (of a government agency) is comparable to a business firm's... |
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Definition
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Term
| what are discretionary programs |
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Definition
| those that Congress renews the budget for each year |
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Term
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Definition
| transfer payment programs like ss, medicare, medicaid...determined by the number of individuals eligible for payments under existing rules, are automatically funded |
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Term
| line budgeting system (of program budgeting) |
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Definition
| compares budget proposals of agencies in a department with each other, regardless of mission |
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Term
| cost-effectiveness analysis |
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Definition
| a technique for determining the minimum-cost combination of government programs to achieve a given objective |
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Term
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Definition
| bases the current budget on the previous year's budget with only minor changes in funding levels for various programs included in the budget |
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Term
| three things proponents of incremental budgeting argue |
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Definition
| that it minimizes political conflict, reduces cost of the budget process, and avoids disruptive changes in government spending policy in a given year |
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Term
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Definition
| a practical technique for determining the relative merits of alternative government programs over time |
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Term
| 3 steps involved in cost-benefit analysis |
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Definition
1. enumerate all costs and benefits of the proposed project.
2. evaluate all costs and benefits in dollar terms
3. discount future net benefits (so they can be compared w/dollar amount of budget authority necessary to finance project) |
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Term
| three components of wealth |
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Definition
| property, movable assets, investments (stocks, bonds) |
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Term
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Definition
| value used to calculate future net benefits: if present value is $95.24 now and interest rate is 5%, in one year value will be $100. |
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Term
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Definition
| percentage rate of return representing the opportunity cost of displaced private expenditure when a government project is undertaken |
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Term
| why is it important to chose the appropriate discount rate in a CBA? |
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Definition
| it affects the ranking of alternative projects and the number of projects that can be approved |
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Term
| social opportunity cost of funds |
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Definition
| percentage rate of return that savers and investors forgo to give up either consumption or investment to finance a government project |
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Term
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Definition
| the sum of the real interest rate and the rate of inflation |
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Term
| 2 ways projects are ranked in CBA |
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Definition
| 1. by present value of their discounted net benefits; 2. according to the ratio of the present value of benefits to present value of costs. |
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Term
| physical infrastructure (of a nation) |
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Definition
| a nation's transportation and environmental capital, including its schools, power and communication networks, and health care system |
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