Cost Benefit Analysis and California Tax Policy

These flashcards cover key concepts related to cost analysis, taxation principles and methodologies as discussed in the lecture.

Cost Effectiveness Analysis

A method used to calculate costs of alternatives and express a measure of an intangible benefit in terms of benefit per dollar of cost.

Cost-Benefit Analysis

A process that shows net benefits of a project or the benefit to cost ratio; requires that benefits be monetized.

Vertical Equity

A principle assessing how taxes are distributed across different household income levels, usually measured by income quintiles.

Horizontal Equity

A principle that looks at how taxes are distributed among households with the same income, focusing on fairness within the same income quintile.

Progressive Tax

A tax system where individuals with higher income pay a larger percentage of their income as tax.

Regressive Tax

A tax system that places a heavier burden on low-income earners relative to their income, resulting in lower-income individuals paying a larger share of their income in taxes.

Flat Tax

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

Discount Rate

The interest rate used to determine the present value of future cash flows.

Randomized Control Trial

A study design that randomly assigns participants to treatment or control groups to measure the effect of a treatment.

Marginal Tax Rate

The tax rate applied to the next dollar of income earned.