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Types of Taxes. Economics I – Shawnee Mission West. Progressive Tax. A tax that imposes a higher percentage rate of taxation on persons with higher incomes. Regressive Tax. A tax that imposes a higher percentage rate of taxation on low incomes than on high incomes
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Types of Taxes Economics I – Shawnee Mission West
Progressive Tax • A tax that imposes a higher percentage rate of taxation on persons with higher incomes
Regressive Tax • A tax that imposes a higher percentage rate of taxation on low incomes than on high incomes • Examples include the sales tax
Proportional Tax • Imposes the same percentage rate of taxation on everyone, regardless of income
Individual Income Tax • The tax on people’s earnings
Corporate Income Tax • The tax a corporation pays on its profits
Sales Tax • A tax levied (charged) on most consumer purchases • Some states do not have
Sin Tax • A relatively high tax designed to raise revenue and reduce consumption of a socially undesirable product such as liquor or tobacco
Value Added Tax • A tax placed on the value that manufacturers add at each stage of production
Excise Tax • A tax on the manufacture or sale of selected items, such as gasoline or liquor
Estate Tax • The tax the government levies on the transfer of property when a person dies
Property Tax • Is a levy on property that the owner is required to pay • Typically on homes and cars