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Flashcards in Tax Incidence Deck (55)
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1

direct tax

tax on income and wealth

2

How are direct taxes paid to government?

directly and without intermediary

3

Can direct taxes be adjusted?

yes - adjust rate based on income

4

indirect tax

tax on the production and consumption of goods and services

5

Who bears the burden of indirect taxes?

shared by consumers and producers

6

How are indirect taxes paid to government?

through intermediaries such as producers

7

sales tax

tax placed on a good when it is sold as a final good to a consumer

8

Are sales taxes changing?

yes based on retail value of good

9

ad valorem tax

tax placed on every transaction in the production life of good

10

How is an ad valorem tax different to a sales tax?

charged to every transformative stage of produciton where good is exchanged and ownership changed

11

Do ad valorem taxes change?

yes based on retail value

12

What are the other names for per-unit tax?

specific tax excise tax

13

per-unit tax

tax where a fixed amount of money per good is charged

14

tariff

tax on imported goods, levied upon entry into a country

15

What are the other names for tariff?

custorms duty impost

16

Are tariffs changing?

no generally specific tax

17

Graph for ad valorem tax

18

Graph for per-unit tax

19

How do lump sum taxes affect the supply curve?

no effect

20

What is assumed when apply tariffs?

constant price of imported good

21

taxes ---- the prices of goods and services

increase

22

taxes ---- the output of goods and services

reduce

23

the size of the market for the good or service is ----

diminished

24

consumer surplus is ---- as consumers pay a higher price

reduced

25

producer surplus is ---- as producers after-tax revenue is ----

reduced reduced

26

government enjoys ---- tax revenue

greater

27

tax incidence

relative measurement of the respective burden of a per-unit tax on the consumers and producers

28

What does deadweight welfare loss represent?

existence of inefficiency in the market

29

Where is consumer surplus found at equilibrium?

A + B + C + D

30

Where is producer surplus found at equilibrium?

E + F + G + H