Tax Systems: Progressive vs. Proportional

These flashcards cover key terms and concepts related to tax systems discussed in the lecture.

Progressive Tax

A tax system where tax rates increase as income increases.

Proportional Tax

A tax system where everyone pays the same tax rate, regardless of income level.

Fair Tax

A proposal to replace the income tax system with a broad-based retail consumption tax.

Underground Economy

Economic activity that is not reported to the government and is often illegal.

Taxpayer Base

The group of people or entities that are subject to taxation.

Federal Withholding

The portion of an employee's wages withheld by employers to pay federal taxes.

Prebate

A preemptive rebate given to households to offset taxes under the fair tax system.

Corporate Tax Rate

The percentage of corporate profits that is paid as tax to the government.

Rebate

A return of a portion of the payment to the payer.

Nobel Prize Winning Economists

Economists who have received the Nobel Prize for their significant contributions to the field of economics.