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TAX PROPORTIONALITY: The proportion of income paid in taxes at different levels of income. In some taxes the proportion of income paid in taxes increases with income in other cases it decreases. And in still other cases, it remains the same. The three basic types of taxes are proportional taxes, progressive taxes, and regressive taxes. Because almost everyone would like to pay fewer taxes (and presumably have others pay more), tax proportionality is a the center of political controversy. Higher incomes prefer regressive taxes and lower incomes prefer regressive taxes.

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PRODUCER SURPLUS

The revenue that producers obtain from a good over and above the price paid. This is the difference between the minimum supply price that sellers are willing to accept and the price that they actually receive. A related notion from the demand side of the market is consumer surplus.

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