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VI. Match each term in Column a with its definition in Column b:

Column A Column B

1. proportional tax

a. A financial plan that summarizes income and expenditures over a period of time.

2. progressive tax

b. Raising of money from individuals and organizations by the state in order to pay for the goods and services it provides.

3. regressive tax

c. One that takes a higher percentage of a low income and a lower percentage of high income.

4. sales tax

d. One that takes the same percentage of all incomes regardless of size.

5. property taxes

e. One that takes a larger percentage of a higher income and a smaller percentage of a lower income.

6. tax assessor

f. A regressive tax added to the price of goods at the time they are sold.

7. budget

g. A person who places value on property for tax purposes.

8. taxation

h. A tax on real estate, land and buildings.

VII. Define which of the following items best completes

the statement:

1. Sometimes, government decreases taxes to encourage consumer

spending. Which reason to collect taxes does this policy illustrate?

a. To pay the cost of government.

b. To protect selected industries.

c. To regulate the level of economic activity.

d. To discourage or encourage certain industries.

2. The financial plan of a government is called

a. its debt.

b. taxation.

c. national planning.

d. a budget.

3. The government’s budget will have a deficit whenever

a. taxes are reduced.

b. taxes are increased.

c. spending is increased.

d. spending is greater than revenue.

VIII. Complete the following sentences:

1. There are three types of taxes in the USA ... . 2. A proportional tax is one that ... . 3. A progressive tax is ... . 4. A regressive tax is ... . 5. A sales tax is ... . 6. Most states allow their merchants ... . 7. The sales tax generally is a very effective means ... . 8. A major source of revenue is ... . 9. Real property includes ... . 10. Tangible property is ... . 11. Intangible personal property includes ... . 12. The main problem with personal property as a source of revenue is ... . 13. A tax assessor is ... .

  1. Say whether these statements are true or false and if they are

false say why:

1. A proportional tax imposes the same percentage rate of taxation on everyone. 2. A progressive tax imposes a higher percentage rate of taxation on higher incomes. 3. A regressive tax imposes a low percentage rate of taxation on low incomes. 4. A sales tax is a general tax levied on essentials only. 5. It is collected by special government agencies. 6. Tangible property is all items of wealth not permanently attached to land or buildings. 7. Intangible property includes stocks, bonds, mortgages, and bank accounts. 8. Every item of personal property is taken into account by the tax assessor. 9. The evaluation of property doesn’t present a problem.

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