Enhance Your Learning with Economics - Laffer Curve Flash Cards for quick understanding
A theoretical curve illustrating the relationship between tax rates and government revenue. It suggests that there is an optimal tax rate that maximizes revenue, beyond which higher tax rates lead to reduced revenue.
The levying of taxes on individuals and businesses by the government to fund public expenditures and services.
The percentage of income or value of a good or service that is paid as tax.
The income received by the government from various sources, including taxes, fees, and fines.
The tax rate that maximizes government revenue without causing significant negative effects on economic growth and incentives.
The responsiveness of tax revenue to changes in tax rates. It measures the percentage change in revenue resulting from a 1% change in tax rates.
The distribution of the burden of a tax between buyers and sellers, or between different groups in society.
The legal use of strategies or loopholes to minimize tax liability, often through the use of deductions, credits, or offshore accounts.
The illegal act of intentionally avoiding paying taxes by underreporting income, inflating deductions, or hiding assets.
An economic theory that emphasizes the importance of incentivizing production and supply to stimulate economic growth and improve overall welfare.
A term used to describe the economic policies implemented by President Ronald Reagan in the 1980s, which included tax cuts and deregulation.
A theory that suggests that reducing taxes on the wealthy and businesses will stimulate economic growth, benefiting society as a whole.
A method used to estimate the economic effects of changes in tax policy, taking into account the potential impact on economic growth and behavior.
The idea that reducing tax rates can lead to an increase in tax revenue, contrary to the traditional belief that lower tax rates always result in lower revenue.
Reductions in tax rates or changes in tax laws that result in lower tax liabilities for individuals and businesses.
Changes to the tax system aimed at improving efficiency, fairness, and simplicity, often involving modifications to tax rates, deductions, and exemptions.
A tax system in which the tax rate increases as the taxable amount or income increases, resulting in higher tax burdens for higher-income individuals.
A tax system in which the tax rate decreases as the taxable amount or income increases, resulting in higher tax burdens for lower-income individuals.
A tax system in which all individuals and businesses are taxed at the same rate, regardless of their income or financial situation.
The loss of economic efficiency that occurs when the allocation of resources is not optimal due to market distortions, such as taxes.
The perception that the tax system treats individuals and businesses fairly, taking into account their ability to pay and the distribution of tax burdens.
The degree to which a tax system imposes higher tax rates on higher-income individuals, reflecting the principle of ability to pay.
The transfer of wealth or income from higher-income individuals to lower-income individuals through the tax system, often achieved through progressive tax rates and social welfare programs.
The extent to which a tax system minimizes economic distortions and administrative costs, while maximizing revenue collection and compliance.
The total amount of income, property, or goods and services subject to taxation.
A provision in the tax code that allows certain individuals, organizations, or activities to be excluded from taxation.
An expense or allowance that can be subtracted from a taxpayer's income, reducing the amount of income subject to taxation.
A dollar-for-dollar reduction in the amount of tax owed, often provided as an incentive for specific activities or behaviors.
A financial or economic benefit provided by the government through the tax system to encourage certain behaviors or investments.
The degree to which individuals and businesses fulfill their tax obligations, including filing tax returns accurately and paying taxes on time.
The difference between the amount of tax owed to the government and the amount actually paid, resulting from non-compliance, underreporting, or tax evasion.
An examination and verification of a taxpayer's financial records and tax returns by the government to ensure compliance with tax laws and regulations.
The process of organizing financial affairs and transactions in a way that minimizes tax liability and maximizes after-tax income.
A legal strategy or investment vehicle that allows individuals or businesses to reduce their taxable income or liability, often through deductions or exemptions.
Jurisdictions or countries that offer favorable tax treatment and financial secrecy to individuals and businesses, often resulting in tax avoidance or evasion.
An agreement between two or more countries that sets out the rules for taxing cross-border income and preventing double taxation.
The set of laws, regulations, and administrative procedures that govern the imposition and collection of taxes in a country or jurisdiction.
The government's approach and decisions regarding taxation, including tax rates, exemptions, deductions, and incentives, aimed at achieving economic and social objectives.
The government agency or department responsible for administering and enforcing tax laws, collecting taxes, and providing taxpayer services.
The assessment of the effectiveness and impact of tax policies on economic growth, income distribution, and other social and economic indicators.
The total amount of taxes paid by individuals or businesses, often measured as a percentage of income or economic output.
The rivalry between countries or jurisdictions to attract businesses and investment by offering favorable tax rates and incentives.
The principle that each country has the right to determine its own tax policies and collect taxes within its jurisdiction, without interference from other countries.
The relationship between tax policies and their impact on economic growth, investment, productivity, and innovation.
The impact of tax policies on income distribution and the gap between the rich and the poor, often measured by the Gini coefficient or other inequality indices.
The role of tax policies in funding social welfare programs, reducing poverty, and promoting social justice and equality.
The study of how tax policies and incentives influence individual and collective behavior, including work, saving, consumption, and investment decisions.
The challenges and opportunities posed by international trade, investment, and financial flows for tax systems and policies, including base erosion and profit shifting (BEPS).
The role of tax policies in promoting sustainable development, reducing pollution, and addressing climate change, through measures such as carbon taxes or green incentives.
The role of tax revenues in funding public expenditures, including infrastructure, education, healthcare, defense, and social programs.
The use of tax policies as a tool for macroeconomic management, including stabilizing the economy, controlling inflation, and reducing budget deficits or debt.
The impact of tax policies on developing countries, including issues of tax capacity, tax justice, and the role of international aid and cooperation.