What Qualifies as a Tax? - Vocabulary Flashcards

A set of vocabulary flashcards covering key concepts from the notes on what qualifies as a tax and related terms.

Tax

A payment required by a government that is not tied to a specific benefit and is used to fund government operations.

Revenue

Funds raised through taxes to finance government activities.

Fines and penalties

Punitive payments intended to punish or deter illegal behavior, unlike taxes.

Sin tax

A tax designed to discourage harmful behaviors by imposing higher surcharges on products like alcohol and tobacco.

Definition of a tax

The formal criteria: payment is required, imposed by a government, and not directly tied to a specific benefit.

Government agency

The federal, state, or local body that has the authority to impose taxes.

Mandatory

Describes payments that are required rather than voluntary.

Imposed by a government agency

Indicates a tax is created and enforced by a government authority.

Not tied directly to the benefit

Means the tax payment does not correspond to a specific service or good received.

Earmarked tax

A tax designated for a particular purpose, yet still legally a tax.

Local surcharge

A local tax assessed to fund a project, such as roadway construction.

Tax deduction

A deduction from income allowed by the tax code that encourages behaviors like charitable giving, retirement saving, or research and development.

Yellowstone fee

Entrance price to Yellowstone that is a fee, not a tax, because a specific benefit is received.

Toll

A charge for using a road or bridge; not a tax because it is tied to a specific service.

Parking meter fee

A fee charged for parking; not a tax, as it buys parking services.

Annual licensing fee

A yearly payment for a license; not a tax, because it funds a specific licensing service.

Cigarette tax

A tax levied on tobacco products at federal, state, and local levels, often with multiple layers.

National defense

A government service funded by taxes that benefits society and security as a whole.

Interstate highway system

A nationwide network funded by taxes to provide public road infrastructure.

Public schools

Government-provided education funded by taxes for the public.