1. Tax Bases Anderson: Structure of Taxes

2. Copyright © by Houghton Mifflin Company. All rights reserved. 2 Introduction What is taxed—also known as the tax base. The tax base for income, sales, VAT and other taxes. Concepts and issues of tax rates.

3. Size of the US government is relatively small

4. Most spending occurs at the federal level

5. Fiscal trends in the US are remarkably stable

6. Effect of Great Recession on Debt and Deficit

7. State/local revenue and spending are trending upward

8. Copyright © by Houghton Mifflin Company. All rights reserved. 8 Taxation in the Circular Flow of Income and Product

9. payroll tax A tax levied on income earned on one’s job. Taxes on Earnings Taxes on Individual Income individual income tax A tax paid on individual income accrued during the year. capital gains Earnings from selling capital assets, such as stocks, paintings, and houses. Types of Taxation

10. Taxes on Corporate Income corporate income tax Tax levied on the earnings of corporations. Taxes on Wealth wealth taxes Taxes paid on the value of the assets, such as real estate or stocks, held by a person or family. property taxes A form of wealth tax based on the value of real estate, including the value of the land and any structures built on the land. estate taxes A form of wealth tax based on the value of the estate left behind when one dies. Types of Taxation

11. Taxes on Consumption consumption tax A tax paid on individual or household consumption of goods (and sometimes services). sales taxes Taxes paid by consumers to vendors at the point of sale. excise tax A tax paid on the sales of particular goods, for example, cigarettes or gasoline. Types of Taxation

12. Ad Valorem and Unit Tax Examples

13. Sources of US Tax Revenue

14. Taxation Around the World