Int. ACCT 1 - UARK – Rowe Prep
Exam 2025 (Graded A+)
What percentage of the government revenue comes from things other than taxes? - Less than 6%
Tax - a payment required by a government that is unrelated to any specific benefit or service received
from the government
3 Key Components of a Tax - - Payment is Required
- Payment is imposed by a government agency (federal, state, or local)
- Payment is not tied directly to benefit received by the taxpayer
How to Calculate a Tax - = Tax Base x Tax Rate
Tax Rate - level of taxes imposed on the tax base and is usually expressed as a percentage
Tax Base - defines what is actually taxed and is usually expressed in monetary terms
Proportional Tax Rate (Flat Tax) - imposes a constant tax rate throughout the tax base
Progressive Tax Rate - imposes an increasing marginal tax rate as the tax base increases (as the tax
base increases, the marginal tax rate and taxes paid increase)
Regressive Tax Rate - imposes a decreasing marginal tax rate as the tax base increases (as the tax
base increases, the taxes paid increase, but the marginal tax rate decreases)
Average Tax Rate - the taxpayers average level of taxation on each dollar of taxable income (total
tax/taxable income)
, Effective Tax Rate - the taxpayer's average rate of taxation on each dollar of total income (both
taxable and non-taxable) (total tax/total income)
Marginal Tax Rate - tax rate that applies to the next additional increment of a taxpayer's taxable
income (change in tax/change in taxable income)
Types of Federal Taxes - - Income taxes
- Employment and unemployment taxes
- Excise taxes
- Transfer taxes
Types of State and Local Taxes - - Sales and use taxes
- Property taxes
- Income taxes
- Excise taxes
Income Taxes - levied on individuals, corporations, estates, and trusts
Employment and Unemployment Taxes - social security tax and the medicare tax - paid by employee
and employer
Unemployment Taxes - paid by employer only
Excise Taxes - levied on the quantity of products sold
Estate & Gift Taxes - tax on fair market value of wealth transferred upon death or by gift
Use Taxes - the tax base is the retail price of goods owned, possessed, or consumed within a state
that were not purchased in that state
Ad Valorem Taxes - the tax based for each is the fair market value of the property
Exam 2025 (Graded A+)
What percentage of the government revenue comes from things other than taxes? - Less than 6%
Tax - a payment required by a government that is unrelated to any specific benefit or service received
from the government
3 Key Components of a Tax - - Payment is Required
- Payment is imposed by a government agency (federal, state, or local)
- Payment is not tied directly to benefit received by the taxpayer
How to Calculate a Tax - = Tax Base x Tax Rate
Tax Rate - level of taxes imposed on the tax base and is usually expressed as a percentage
Tax Base - defines what is actually taxed and is usually expressed in monetary terms
Proportional Tax Rate (Flat Tax) - imposes a constant tax rate throughout the tax base
Progressive Tax Rate - imposes an increasing marginal tax rate as the tax base increases (as the tax
base increases, the marginal tax rate and taxes paid increase)
Regressive Tax Rate - imposes a decreasing marginal tax rate as the tax base increases (as the tax
base increases, the taxes paid increase, but the marginal tax rate decreases)
Average Tax Rate - the taxpayers average level of taxation on each dollar of taxable income (total
tax/taxable income)
, Effective Tax Rate - the taxpayer's average rate of taxation on each dollar of total income (both
taxable and non-taxable) (total tax/total income)
Marginal Tax Rate - tax rate that applies to the next additional increment of a taxpayer's taxable
income (change in tax/change in taxable income)
Types of Federal Taxes - - Income taxes
- Employment and unemployment taxes
- Excise taxes
- Transfer taxes
Types of State and Local Taxes - - Sales and use taxes
- Property taxes
- Income taxes
- Excise taxes
Income Taxes - levied on individuals, corporations, estates, and trusts
Employment and Unemployment Taxes - social security tax and the medicare tax - paid by employee
and employer
Unemployment Taxes - paid by employer only
Excise Taxes - levied on the quantity of products sold
Estate & Gift Taxes - tax on fair market value of wealth transferred upon death or by gift
Use Taxes - the tax base is the retail price of goods owned, possessed, or consumed within a state
that were not purchased in that state
Ad Valorem Taxes - the tax based for each is the fair market value of the property
