Term
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Definition
| increase retirement age, increase payroll taxes to yield at least 2%, privatization |
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Term
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Definition
| subsidizes insurance premium, financed through payroll taxes and fees |
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Term
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Definition
| Item or activity to be taxed, Can be wealth, income or consumption |
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Term
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Definition
| tax of all economic base with no exclusions, etc |
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Term
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Definition
| taxes only a proportion of the tax base |
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Term
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Definition
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Term
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Definition
| tax on a percentage of the value of an item |
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Term
| Proportional Tax rate structure |
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Definition
| tax rate does not vary with size of base. MTR = ATR |
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Term
| Progressive tax rate structure |
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Definition
| tax rate increases with size of base. MTR eventually exceeds ATR. |
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Term
| Regressive Tax Rate Structure |
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Definition
| tax rate decreases with size of base. MTR eventually declines below ATR. |
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Term
| Individual excess of burden |
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Definition
| the loss in well-being to a tax-payer caused by the sub. Effect of a price-distorting tax. |
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Term
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Definition
| the loss in net benefits from resources use caused by the sub. Effects of a tax. Also called “dead weight loss of a tax” over and above the value of the taxes collected |
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Term
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Definition
| measures the distribution of the burden of paying a tax. The more inelastic the supply , the greater share of tax burden on the sellers, and vise versa |
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Term
| Benefit Principle of Taxation |
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Definition
| taxes should vary w. benefit from gov services |
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Term
| The ability to pay principle |
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Definition
| taxes should vary based on ability to pay and minimize sacrifices from paying taxes. |
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Term
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Definition
| A lump-sum subsidy is a payment made by government to individuals independent of the recipients income, consumption or wealth. No sub. effect |
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Term
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Definition
| Excludable, can be used up, no externalities, market demand found by adding up indiv. demands horizontally |
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Term
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Definition
| Demand found by adding up indiv. demands vertically, only pos externalities |
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Term
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Definition
| Equal tax shares, convex preferences, variation in most preferred outcomes among voters: t=AC/n |
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Term
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Definition
| losses in well being that occur when voters do not obtain their most preferred outcomes |
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Term
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Definition
| political externalities are zero |
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Term
| Political transaction costs |
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Definition
| the value of time, effort, and other resources expended to reach a collective choices. These increase with the percent of the voting population required to pass a proposal |
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Term
| Equation for the effect on wages caused by taxes and elasticities |
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Definition
| W = (1/2) * t^2 * (Pstar*Qstar) * ((Es * Ed)/(Es - Ed)) |
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Term
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Definition
| minimize the total excess burden of taxation by taking into account multimarket effects of general taxation |
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Term
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Definition
| Increases interest rates, must be planned to be paid off in the future, about half owned by foreigners |
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