Taxation Flashcards Preview

Economics > Taxation > Flashcards

Flashcards in Taxation Deck (31)
Loading flashcards...
1

Where is tax sourced from?

Income, goods and services, property and wealth

2

Purpose of tax

Raise revenue, redistribution of income from wealthy to poor, resource allocation, regulating business cycle fluctuations

3

Impact

Where the tax is applied

4

Incidence

Where the burden falls/who pays

5

PAYG

Pay as you go

6

Direct taxation

Collected from income, impact/incidence on same person

7

Indirect taxation

Collected from expenditure, seller passes tax price to consumers

8

Progressive tax

Claims higher proportion of income as it rises

9

Regressive tax

Decreasing proportion of income as it rises

10

Proportional tax

Claimed at equal rate regardless of income

11

Principles of taxation

Fair, simple, efficient

12

Canons of taxation

Equity, economy, certainty, convenience

13

Horizontal equity

Taxpayers earning same should pay same

14

Why achieve principles of taxation?

Improve economic wellbeing

15

Vertical equity

Taxpayers with greater capacity to pay tax should pay higher amounts

16

Why should taxation systems be simple?

Participants should understand what and how much taxes they pay, convenient as possible

17

How are taxation systems made to be efficient?

Benefits must outweigh costs, same levels of tax for industries/products

18

FBT

Highest marginal tax rate on non-cash benefits with salary package

19

Incidence and impact of company tax

Impact on company, incidence on consumers

20

Wholesales sales tax

Rate of tax based on luxury of item, 1930s-2000

21

GST

10% tax on non-essentials

22

Excise duties

Raise large revenue without affecting consumption patterns , inelastic products

23

Customs duty

Protects Australian producers from overseas competition

24

CGT

Levied on profits from sold assets held for 12+ months, adjusted for inflation

25

What does CGT apply to?

Shares, investment properties, business goodwill, items bought with intention to resell

26

What does CGT NOT apply to?

Personal items (houses, cars, boats)

27

Stamp duty

Levied on ransfer of ownership of property/assets

28

Dividend imputation

1987, prevents company profits from being taxed twice

29

Which products tend to have excise duties?

Petrol, cigarettes, alcohol

30

Why are regressive taxes "unfair"?

Uses higher proportion of low earner's income