Describe the difference between
selective and general sales
taxes.
• General sales tax applies the same
tax rate to the purchase of all items.
• Selective sales taxes apply a higher
tax rate to the purchase of specific
items.
Explain what effect
inaccurate assessments have
on millage.
• Inaccurate assessments cause the
millage rate to be higher for all property
tax payers.
• It particularly hurts those taxpayers
whose assessments are high because
they also have to deal with the higher
millage rates.
Define progressive taxation and
give one example of it.
• Progressive taxation is when the tax rate that
is charged increases as the person’s ability to
pay the tax increases.
• This means they not only pay more in taxes
because they earn more, but also because
their bill is calculated using a higher
percentage rate.
• Example: Federal Income Tax
Define regressive taxation and
give one example of it.
• Any tax that is calculated without taking a
person’s abiltiy to pay the tax into
consideration. In other words, the tax bill is
calculated on something other than the
person’s income.
• This hurts poorer taxpayers.
• Examples: Property taxes; Sales taxes;
$52 Emergency Medical Services tax;
$10 Occupational Privilege Tax
Define proportional taxation and
give one example of it.
• Any taxation system that charges
each person the same percentage
of their income
• Pennsylvania income tax is an
example. All Pennsylvanians pay
3.07% of their income.
Describe the difference between
estate and inheritance taxes.
• Estate: Paid if an estate is worth over
five million dollars at the time of a
person’s death. Tax bill is based on the
total value of the entire estate. Paid to
the federal government.
• Inheritance: Paid by an individual for
the value of the specific items they
inherit. Tax bill is based on the value of
the specifc item(s) a person inherits.
Define and/or give examples of
both tangible and intangible
personal property.
• Tangible Personal Property: things
whose value can be seen and touched;
cars, boats, jewelry
• Intangible Personal Property: things
whose value is understood, but cannot
actually be seen or touched; bank
accounts; investments like stocks or bonds
Give one example of an
entitlement program and explain
how they affect our deficit.
• Examples include: Social Security,
Medicare, and Medicaid
• Because the existing rules for these
programs guarantee payments for anyone
who meets the eligibility requirements
(citizenship; age and/or income),
Congress does not get to decide how
much is spent each year.
Explain the difference
between deficit and debt.
• Deficit: the amount by which
expenditures exceeds revenue
for a given year; the shortfall of
funds for current spending
• Debt: the accumulated amount of
money owed; If deficits occur for
many years, the debt will the the
sum total of those deficits.
Explain the difference between
market value and assessed value.
• Market Value is what a piece of
property is actually worth if it were to
be bought or sold.
• Assessed Value is what a county
decides the property is worth for
calculating your property tax bill.
Describe the difference between
real and personal property.
• Real property: Real estate (land
and the buildings that are on that
land)
• Personal: Any other property a
person owns. This can be money
and investments (intangible
property) or actual possessions
(tangible property)
Bucks County
Market Value to Assessed Value:
$250,000 x .11 = $27,500
Millage:
.017
$27,500 x .017 = $467.50
Montgomery County
Market Value to Assessed Value:
$125,000 x .58 = $72,500
Millage:
.013
$72,500 x .013 = $942.50