Chapter 8 - Taxation

• Income Tax


  A source deduction that is based on how much money you make.
• Sales Tax


  A percentage paid in addition to the purchase price of a good or service.
• Source Deduction


  Monies taken directly off of a pay check by government.
• Goods and Services Tax

  The 5% federal sales tax.
• Provincial Sales Tax


  A sales tax collected by provinces; Alberta doesn't have one.
• Harmonized Sales Tax


  A combination federal and provincial sales tax.
• Black Market


  Also called the underground economy - where illegal economic activities take place.
• Tax Evasion


  Criminal behaviour involving not paying your correct taxes.
• Taxation model


  Policy regarding what to tax and how to use tax dollars.
• Tax base


  All of the taxed economic activity in a society.
• Social Services


  Largest recipient of Canadian federal tax dollars.
• Health


  Largest recipient of Alberta's tax dollars.
• Under the Table


  A common tax evasion technique is to be asked to be paid "here", meaning there is no record of the income.
• Employment Insurance (EI)


  Provides a basic subsistence payment to employees who are between jobs
• Canada Pension Plan (CPP)


  Provides income to retired individuals through employee and employer taxes deducted from payroll.
• Property Tax


  A municipal tax on the value of a property
• Gross Income


  Total amount of income from wages before any payroll deductions
• Net Income


  "Take home" income amount after deductions
• Self-Assessment


  Self-evaluation of tax situation once a year
• CRA


  Canada Revenue Agency, the governing body that controls taxation
• Tax Refund


  An amount that a government gives back to a taxpayer who has paid more taxes than were due
• Tax Return


  Set of forms that taxpayers use to calculate their tax obligation