1. How Taxes Work
Unit 14.1

2. Government Revenue Revenue Principles of Taxation
Non-Tax
Principles of Taxation
Benefits-Received
People should pay according to the benefit they receive
Ability-to-Pay
People should pay based on ability, no matter which benefits they receive
Criteria for Taxation
Simplicity
Equity
Efficiency

3. Tax Bases and Structures
Types of wealth subject to taxation
Individual income tax
Corporate income tax
Sales tax
Property tax
Tax Structures
Proportional Tax
Progressive Tax
Regressive Tax

4. Who Pays the Tax?
Elasticity and Taxes

5. Impact of Taxes on the Economy
Resource Allocation
Taxing certain goods will transfer resources
Productivity and Growth
Tax rates high reduces incentive to work?
Taxes cause underground economy
Economic Behavior
Tax Incentives
Excise taxes on liquor and cigarettes
Tax write-offs for charitable donations