To generate revenue for government spending

To control inflation

To promote economic growth

To redistribute income

Sales tax

Income tax

Property tax

Value-added tax (VAT)

Progressive taxes have a higher tax rate for higher incomes, while regressive taxes have a higher tax rate for lower incomes.

Progressive taxes have a higher tax rate for lower incomes, while regressive taxes have a higher tax rate for higher incomes.

Proportional taxes have the same tax rate for all income levels.

Progressive taxes have a higher tax rate for middle incomes, while regressive taxes have a higher tax rate for lower and higher incomes.

To stimulate economic growth during recessions

To reduce inflation during periods of high economic growth

To balance the government budget

To promote international trade

Increasing government spending

Raising taxes

Reducing government spending

Balancing the government budget

The tendency for government spending to increase faster than inflation

The tendency for government spending to increase faster than economic growth

The tendency for government spending to decrease faster than inflation

The tendency for government spending to decrease faster than economic growth

A graphical representation of the relationship between tax rates and tax revenue

A graphical representation of the relationship between government spending and economic growth

A graphical representation of the relationship between inflation and unemployment

A graphical representation of the relationship between interest rates and economic growth

A budget deficit occurs when government spending exceeds tax revenue, while a budget surplus occurs when tax revenue exceeds government spending.

A budget deficit occurs when government spending exceeds economic growth, while a budget surplus occurs when economic growth exceeds government spending.

A budget deficit occurs when government spending exceeds inflation, while a budget surplus occurs when inflation exceeds government spending.

A budget deficit occurs when government spending exceeds interest rates, while a budget surplus occurs when interest rates exceed government spending.

The distribution of the burden of taxation among different groups in society

The distribution of tax revenue among different levels of government

The distribution of tax revenue among different types of taxes

The distribution of tax revenue among different countries

To reduce income inequality

To increase economic growth

To balance the government budget

To promote international trade

VAT is a tax on the value added to a product or service at each stage of production, while a sales tax is a tax on the final sale of a product or service.

VAT is a tax on the value added to a product or service at each stage of distribution, while a sales tax is a tax on the final sale of a product or service.

VAT is a tax on the value added to a product or service at each stage of consumption, while a sales tax is a tax on the final sale of a product or service.

VAT is a tax on the value added to a product or service at each stage of production, distribution, and consumption, while a sales tax is a tax on the final sale of a product or service.

The responsiveness of tax revenue to changes in economic activity

The responsiveness of government spending to changes in economic activity

The responsiveness of inflation to changes in economic activity

The responsiveness of interest rates to changes in economic activity

To ensure that government spending does not exceed tax revenue

To ensure that government spending does not exceed economic growth

To ensure that government spending does not exceed inflation

To ensure that government spending does not exceed interest rates

Legally reducing one's tax liability

Illegally reducing one's tax liability

Increasing one's tax liability

Avoiding paying taxes altogether

A tax credit directly reduces the amount of taxes owed, while a tax deduction reduces the amount of taxable income.

A tax credit reduces the amount of taxable income, while a tax deduction directly reduces the amount of taxes owed.

A tax credit is a refundable tax payment, while a tax deduction is a non-refundable tax payment.

A tax credit is a tax payment made in advance, while a tax deduction is a tax payment made after the tax year.