Sales Tax: Taxes assessed on the prices paid on a large set of goods and services.

Static tax analysis: Based on the assumption that changes in the tax rate leave the tax base unaffected

Dynamic Tax Analysis: Recognizes that higher tax rates may shrink the tax base.

Excise Tax: A tax levied on purchases of a particular good or service.

Unit tax: A constant tax assessed on each unit of a good that consumers purchase.

Government budget constraint: The limit on government spending and transfer payments, every dollar spent is paid for by taxes

Marginal Tax Rate = Change in tax payment / change in income

Tax Bracket: Specified interval of income to which a specific and unique tax is placed.

Average Tax Rate = Total Tax Payment / Total Income

Proportional Taxation: Taxpayers pay the same percentage of their income in taxes.

Regressive Taxation: Taxpayers pay less as their income increases.

Capital gain: The positive difference between the purchase price and the sale price of an asset.

Capital loss: The negative difference between the purchase price and the sale price of an asset.

Retained earnings: Earnings that a corporation saves for investments, and that are not distributed to stockholders.

Tax incidence: The distribution of tax burdens among various groups in society.Consumers, stockholders, employees