which best describes a regressive tax?

\text { Available-for-sale investments (at cost) } & 110,250 \\ It waives tariffs on imports from countries with which it has free trade agreements. Under a contractionary taxation policy, the government can reduce the deficit by What are common examples of program revenues? 0 Answers/Comments. The most important regressive tax is the value added tax (VAT), in which a certain percentage of the price paid for a product is charged on top as a tax. The bonds are converted on December 31, 2020. Issued the stock certificates for the stock dividends declared in (h) and paid the cash dividends to the preferred stockholders. Just as Social Security can be considered a regressive tax, it's also a proportional tax because everyone pays the same rate, at least up to the wage base. two bottles for $29.95 A proportional tax is an income tax system that requires the same percentage of income from all taxpayers, regardless of their income. Alcohol taxes, on the other hand, aren't as regressive. To explore this concept, consider the following regressive tax . It manages football parking and tailgating on state property in Austin. The Best Economic Policies The highest-earning fifth spent $114,840 that year. Orjan F. Ellingvag/Dagens Naringsliv/Corbis via Getty Images. Melissa Horton is a financial literacy professional. Paid by businesses or individuals on money they make. a. Many low-income Americans pay no federal income tax at all because of tax deductions. expansionary, contractionary, or proportional, Monetary Policy: The Federal Reserve Quiz, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Statistical Techniques in Business and Economics, Douglas A. Lind, Samuel A. Wathen, William G. Marchal. It means you are having too much withheld, and you could instead earn interest on that money. \text { Common stock, \$25 par (400,000 shares authorized; } & \\ A regressive tax is one where the average tax burden decreases with income. d. Reducing spending, Which terms best describe sales tax? Prepare a multiple-step income statement for the year ended December 31, 2012, concluding with earnings per share. Retainedearningsandbalancesheetdata: Accumulateddepreciationofficebuildingsandequipment, Accumulateddepreciation-storebuildingsandequipment. c. the earnings generated by the property. A regressive tax is what you call when the tax rate decreases as the amount that is to be taxed upon increases. People today are buying more foreign products, and firms are extending their operations on an international scale. On what basis and over what periods of time did Coca-Cola and PepsiCo amortize their intangi ble assets? A trade deficit is when a country loses money on products it makes, while a trade surplus happens when production leads to profits. equal pay for owners and workers. 1. Taxes may be variously described as progressive, proportional, or Tax that takes a larger percentage of a lower-income and a smaller percentage of a higher income is. \text { Office salaries expense } & 165,000 \\ Any tax decreases their ability to afford these basics. As COVID-19 continues to affect lives and livelihoods around the world, we can already see that the pandemic and its economic fallout are having a regressive effect on gender equality.By our calculation, women's jobs are 1.8 times more vulnerable to this crisis than men's jobs. The increases when the income is. b. The federal gas tax was 18.4 cents per gallon, while the average state tax was 30.63 cents per gallon, as of July 2021. What best describes a regressive tax? 37,379,699. questions answered. The government needs to raise taxes or cut spending. Inflation can result from falling demand and boosts the value of money. What type of tax is this? Regressive taxes place more burden on low-income earners. You received a $50,000 inheritance and placed it in a savings account. Ineffective Economic Policies The Constitution Losing weight is easy with Edgozene! See answers. Solved 1- What statement BEST describes FLAT TAXES? - Chegg Selected transactions completed by Everyday Products Inc. during the fiscal year ending December 31, 2012, were as follows: j. Regressive taxes cast harsher burdens on poor or low-earners. Describe the differences between a regressive, progressive and flat tax \end{array} As with any government policy, progressive tax rates have critics. c. Regressive taxes result in poor taxpayers paying no taxes. This is apolitically acceptable wayto raise revenue without increasing tax rates. Abbreviations for depreciation methods are SL for straight-line and DDB for double-declining-balance. Credit unions differ from retail banks because they are But how much of an impact they have depends on the tax system used and how much you make. \end{aligned} A regressive tax system levies the same percentage on products or goods purchased regardless of the buyer's income and is thought to be disproportionately difficult on low earners. The companies complete annual reports, including the notes to the financial statements, are available online. They all pay the same tax rate, regardless of income. Technically, it's not a regressive tax because the rate is the same, but it does impose a greater burden on lower-income familiesthey end up reducing their spending on the basics to pay it. \text { (Year 2) } After all of the transactions for the year ended December 31, 2012, had been posted [including the transactions recorded in part (1) and all adjusting entries], the data below and on the following page were taken from the records of Everyday Products Inc. A regressive tax is a tax that takes a larger percentage of income from low-income earners than from high-income earners. Which States Dont Tax Social Security Benefits? Tax rate, along with tax liability, increases as an individual's wealth increases. Which best describes why governments collect taxes? \end{array} Which of the following best describes a regressive tax? Advertisement. It increases for high-income taxpayers in a progressive system. PDF Can Pennsylvania erase property taxes without wiping out education? Income Taxes, India, Withholding Tax | JD Supra Taxes levied on products that are deemed to be harmful to society are called sin taxes. This payroll tax is typically imposed on employers, not employees, and varies by industry and location. We also reference original research from other reputable publishers where appropriate. 1. ", U.S. Energy Information Administration. The government needs to raise taxes or cut spending. is a Maryland State Registered Tax Preparer, State Certified NotaryPublic, Certified VITA Tax Preparer, IRS Annual Filing Season Program Participant, and Tax Writer. As such, most income tax systems employ a progressive schedule that taxes high-income earners at a higher percentage rate than low-income earners, while other types of taxes are uniformly applied. In contrast, the other individual earns $320 per week, making her clothing sales tax 2.2% of income. are debt certificates that are purchased by an investor. Find a copy (either in hard copy or online) of GASBs Codification of Governmental Accounting and Reporting Standards. Check all that apply. North Wales council's 9.9% tax hike likened to a 'hurricane' that is Direct Regressive, proportional, progressive. Choice 1: 303030-year fixed rate mortgage at 3.5%3.5 \%3.5% with closing costs of $1000\$ 1000$1000 and no points Monetary Policy: The Federal Reserve Quiz, Don Herrmann, J. David Spiceland, Wayne Thomas, Alexander Holmes, Barbara Illowsky, Susan Dean. A higher percentage and number of Texans lack health insurance than residents of any other state. Officials are currently working on the statement of activities within the government-wide financial statements. The bulldozer is expected to require annual maintenance costing$8,000. What is the amount of dividends common shareholders will receive in 2021? Regressive Tax Examples | Different Examples with Explanation - EDUCBA It is a form of escape from taxation wherein the tax is transformed into gain through the medium of production. a. the property owner's income. 4 STUDY GUIDE 2 PART.docx - 3. Explain why taxation is a Regressive taxes may be more politically popular because they are seen as "fair." Regressive taxes may be less likely to cause economic distortions than progressive taxes. A regressive tax is the exact opposite of a progressive tax, which takes the larger percentage from those who earn a higher income. Flat Tax is a system where tax is calculated over a fixed % of income. The SEC makes sure that banks follow federal laws. \text { Asset } & \text { Cost } & \begin{array}{c} High-income earners use tax laws to their advantage to reduce their tax rates. \text { Accounts receivable } & 543,000 \\ more money than an athletic trainer but will have a harder time finding a job. This kind of tax is a bigger burden on low-income earners than high-income earners, for whom the same dollar amount equates to a much larger percentage of total income earned. Incomestatementdata:AdvertisingexpenseCostofmerchandisesoldDeliveryexpenseDepreciationexpense-officebuildingsandequipmentDepreciationexpense-storebuildingsandequipmentDividendrevenueGainonsaleofinvestmentIncomefromLifecareCo.investmentIncometaxexpenseInterestexpenseInterestrevenueMiscellaneousadministrativeexpenseMiscellaneoussellingexpenseOfficerentexpenseOfficesalariesexpenseOfficesuppliesexpenseSalesSalescommissionsSalessalariesexpenseStoresuppliesexpense$125,0003,650,00029,00026,00095,0003,5752,22565,600128,50019,0001,8007,50013,75050,000165,00010,0005,145,000182,000365,00022,000, Retainedearningsandbalancesheetdata:Accountspayable$195,000Accountsreceivable543,000Accumulateddepreciationofficebuildingsandequipment1,580,000Accumulateddepreciation-storebuildingsandequipment4,126,000Allowancefordoubtfulaccounts8,150Available-for-saleinvestments(atcost)110,250Bondspayable,6%,due2022400,000Cash240,000Commonstock,$25par(400,000sharesauthorized;86,570sharesissued,82,670outstanding)2,164,250Dividends:Cashdividendsforcommonstock155,120Cashdividendsforpreferredstock85,000Stockdividendsforcommonstock62,800Goodwill510,000Incometaxpayable40,000Interestreceivable930InvestmentinLifecareCo.stock(equitymethod)689,100InvestmentinNordicWearInc.bonds(longterm)62,000Merchandiseinventory(December31,2012),atlowerofcost(FIFO)ormarket$780,000Officebuildingsandequipment4,320,000Paid-incapitalfromsaleoftreasurystock18,200Paid-incapitalinexcessofpar-commonstock842,000Paid-incapitalinexcessofpar-preferredstock150,000Preferred5%stock,$100par(30,000sharesauthorized;17,000sharesissued)1,700,000Premiumonbondspayable19,000Prepaidexpenses26,500Retainedearnings,January1,20128,708,150Storebuildingsandequipment12,560,000Treasurystock(3,900sharesofcommonstockatcostof$35pershare)136,500Unrealizedgain(loss)onavailable-for-saleinvestments(17,750)Valuationallowanceforavailable-for-saleinvestments(17,750)\begin{aligned}

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