Domestic Policy

Sin tax

A tax on items considered undesirable or harmful, such as alcohol or tobacco

Regressive tax

A tax where high-income taxpayers pay a smaller fraction of their income than low-income taxpayers

Luxury tax

A tax on non-essential or super wealthy-exclusive products or services

Excise tax

Tax on manufacture or sale of specific items like gasoline, cigarettes, and healthcare

FICA

Federal Insurance Contributions Act, providing support for retirees through Social Security and Medicare

Reserve requirement

Amount of cash banks must hold against customer deposits for liquidity

Monetary policy

Setting the money supply by the central bank to influence the economy

Fiscal policy

Using government spending and taxation to impact the economy

Medicaid

Provides health coverage to low-income individuals, children, and elderly

Estate tax

Tax on property transfer after a person's death

Income tax

Tax imposed on income generated by businesses and individuals

GDP

Gross Domestic Product, the value of goods and services produced in a country

Social security

System providing retirement income for American workers

Corporate income tax

Tax levied on corporations' profits

Property tax

Tax on immovable and movable property like land, vehicles, and equipment

Marginal tax rate

Tax rate on each additional dollar of income

Deadweight loss

Reduction in economic well-being due to tax-induced distortions

Vertical equity

Idea that taxpayers with greater ability to pay should pay more taxes

Horizontal equity

Idea that taxpayers with similar abilities to pay should pay the same taxes

Intermediate goods

Products used to produce final goods or finished products