(See related pages)
Below are the key terms featured in this chapter. The textbook's full glossary is also available for online searching.
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| ability to pay | the principle applied to taxation, whereby taxes vary in proportion to a taxpayer's financial resources (See page(s) 190) |
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| benefits received | the principle applied to taxation, whereby taxes are geared to the benefits each taxpayer gains from government activity (See page(s) 190) |
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| Lorenz curve | a graph showing the cumulative distribution of income among a country's households (See page(s) 181) |
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| means testing | a procedure whereby transfer payments vary according to a recipient's income (See page(s) 189) |
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| poverty | a situation in which a person's income is inadequate to provide the necessities of life (See page(s) 184) |
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| poverty line | an income level below which a household is classified as poor (See page(s) 185) |
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| progressive tax | a tax that increases as a proportion of income as income increases (See page(s) 190) |
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| proportional tax | a tax that remains constant as a proportion of income for all incomes (See page(s) 191) |
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| regressive tax | a tax that decreases as a proportion of income as income increases (See page(s) 190) |
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| universality | the principle applied to transfer payments, whereby benefits are provided to all, regardless of income (See page(s) 189) |
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| wealth | ownership of financial assets, such as stocks and bonds, or real assets, such as buildings and land (See page(s) 184) |
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| welfare society | a society in which the government plays a major role in attempting to ensure the economic well-being of its citizens (See page(s) 189) |