Economics Test Out Practice Test

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What is the term for the percentage that is levied on the value of the tax base, such as income or property?

Deadweight loss

Tax rate

The tax rate is the percentage applied to the value of the tax base (like income or property) to determine how much tax is owed. For example, if the base is $50,000 and the rate is 20%, the tax due is $10,000. Tax systems can be flat, applying the same rate to everyone, or progressive, with higher rates on larger portions of the base. Other terms describe different concepts: deadweight loss is the efficiency cost of taxation, inflation rate is how fast prices rise, and unemployment rate measures the share of the labor force that is not employed.

Inflation rate

Unemployment rate