ACCT 2001 Lecture Notes - Lecture 3: Progressive Tax, Use Tax, Tax Rate
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ACCT 2001 Full Course Notes
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. 9 % of wages above a threshold amount: paid by the employees only, not the employers. * lifetime exclusion only reduced by gifts made exceeding k/donee/year. Exclusion is unlimited for spouses and qualifying charities. Ex: sales tax: graduated tax (progressive): base is divided into a series of monetary amounts (brackets) and each bracket taxed differently. Ex: income tax: regressive tax: as base increases, tax decreases. Ex: social security: note: much has been made of the complexity of the federal income tax system and alternatives have been suggested such as the flat tax and a national sales tax. As we will soon see, in the calculation of taxable income, the tax base is what makes the u. s. tax system so difficult. The flat tax doesn"t change the tax base; it simply makes the tax rate the same for everyone. Thus, it is somewhat doubtful whether a flat tax would really simplify anything.
