Free Enterprise

• Paid by anyone who earns an income by any means.
• April 15 is the day that Income Tax filings are due in the U.S.
• Income taxes are subject to deductions and tax credits. They are usually not paid by people under a certain income or who have special situations, such as a disability.

• Paid by anyone who owns property such as land, a home, or commercial real estate
• These taxes are often collected by the state and county to help find their budgets
• While income taxes are subject to deductions or credits, these are often fairly rigid
• Licensing fees on cars, recreational vehicles, and watercraft are property taxes as well

These are taxes on sale goods or items that are subjected to being used by either an individual or a buisness

• All business structures pay tax on the income made in that particular business
• Tax consequences are important when structing a buisness

• User fees are the same for everyone
• A fishing or hunting license is a tax
• Toll road fees are a tax, even if they call it user fees
• So are travel fees, marriage licenses, driver's licenses, inspection stickers (brake tags), and license plate fees

• May be broadly defined as an inland tax on the production or sale of a good
• May be narrowly defined as a tax on a good produced within the country

• A system under which the percentage of tax is taken from income, or charged to individuals, remains the same no matter how much is made or how much is spent
• Also called a flat tax rate
• Regressive tax

• The tax rate applied to either income or profits, or spending, that increases as income/profit, or spending increases
• This is the tax system used in the U.S.
• Those who make the least amount of money tend to pay the lowest percentage of their income in taxes
• People who make larger amounts of money are taxed at a higher percentage

• A tax that tends to increase the total percenatge of income paid on those who must pay the tax
• In contrast, those who have a higher income pay less of their total income on items taxed
• Sales Tax

• Land
• Labor
• Capital
• Entrepreneurship

natural resources

Ex.- water, air, etc.

workers

Ex.- physical, mental

money, tools of production

Ex.- lawnmower, gasoline, factory

the person who takes all three Factors of Production and makes a profit

• What gets produced?
• How is it produced?
• Who gets what is produced?

that which we give up or forgo when we make a decision or choice

When one producer can produce a good or service using fewer resources than another producer

When one producer can produce a good or service at a lower opportunity cost

goods used to produce other goods and services

goods produced for present consumption

the basic arrangements made by societies to solve the economic problem

• Command Economies
• Laissez-faire Economies
• Mixed Systems