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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

P

payroll taxes

Include Social Security and Medicare taxes.

personal exemption

Can be claimed for the taxpayer and spouse. Each personal exemption reduces the income subject to tax by the exemption amount.

Personal Identification Number (PIN)

Allow taxpayers to “sign” their tax returns electronically. The PIN, a five-digit self-selected number, ensures that electronically submitted tax returns are authentic. Most taxpayers can qualify to use a PIN.

progressive tax

A tax that takes a larger percentage of income from high-income groups than from low-income groups.

property taxes

Taxes on property, especially real estate, but also can be on boats, automobiles (often paid along with license fees), recreational vehicles, and business inventories.

proportional tax

A tax that takes the same percentage of income from all income groups.

protective tariff

A tax levied on imported goods with the purpose of reducing domestic consumption of foreign-produced goods.

public goods and services

Benefits that cannot be withheld from those who don’t pay for them, and benefits that may be “consumed” by one person without reducing the amount of the product available for others. Examples include national defense, streetlights, and roads and highways. Public services include welfare programs, law enforcement, and monitoring and regulating trade and the economy.