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Briefly describe the friction layer and how it affects wind speeds.
Marginal Tax Rate
The percentage at which the next dollar earned of taxable income is subjected to tax.
Average Tax Rate
The total amount of taxes paid by an individual or business divided by the taxable income, reflecting the proportion of income paid in taxes.
Flypaper Theory
A concept suggesting that government grants and subsidies stick where they first land, meaning they benefit the entity they're directly given to rather than being efficiently redistributed.
Tax Incidence
The analysis of the effect of a particular tax on the distribution of economic welfare, essentially focusing on who ultimately bears the cost of a tax.
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