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Financial Terms | |
Reaganomics |
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Definition of ReaganomicsReaganomicsThe economic program of President Ronald Reagan, including tax cuts, restraint in spending except for defence spending, and less regulation.
Related Terms:After-tax profit marginThe ratio of net income to net sales. After-tax real rate of returnMoney after-tax rate of return minus the inflation rate. Asymmetric taxesA situation wherein participants in a transaction have different net tax rates. Average tax ratetaxes as a fraction of income; total taxes divided by total taxable income. average tax rateTotal taxes owed divided by total income. Before-tax profit marginThe ratio of net income before taxes to net sales. Break-even tax rateThe tax rate at which a party to a prospective transaction is indifferent between entering ![]() Cash flow after interest and taxesNet income plus depreciation. Classical MacroeconomicsThe school of macroeconomic thought prior to the rise of Keynesianism. Corporate tax viewThe argument that double (corporate and individual) taxation of equity returns makes Corporate taxable equivalentRate of return required on a par bond to produce the same after-tax yield to Current Income Tax ExpenseThat portion of the total income tax provision that is based on Current Tax Payment Act of 1943A federal Act requiring employers to withhold income taxes from employee pay. Deferred Income Tax ExpenseThat portion of the total income tax provision that is the result Deferred Tax AssetFuture tax benefit that results from (1) the origination of a temporary difference Deferred Tax LiabilityFuture tax obligation that results from the origination of a temporary ![]() Deferred taxesA non-cash expense that provides a source of free cash flow. Amount allocated during the Depreciation tax shieldThe value of the tax write-off on depreciation of plant and equipment. depreciation tax shieldReduction in taxes attributable to the depreciation allowance. Detailed ProgramDesign In software development, a detailed step-by-step plan for completing the software. Direct stock-purchase programsThe purchase by investors of securities directly from the issuer. Double-tax agreementAgreement between two countries that taxes paid abroad can be offset against earnings before interest and income tax (EBIT)A measure of profit that Earnings before interest and taxes (EBIT)A financial measure defined as revenues less cost of goods sold Earnings before interest and taxes (EBIT)The operating profit before deducting interest and tax. Earnings before interest, taxes, depreciation and amortization (EBITDA)The operating profit before deducting interest, tax, depreciation and amortization. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)An earningsbased measure that, for many, serves as a surrogate for cash flow. Actually consists of working EBDDT - Earnings before depreciation and deferred taxesThis measure is used principally by Economic assumptionseconomic environment in which the firm expects to reside over the life of the economic components modelAbrams’ model for calculating DLOM based on the interaction of discounts from four economic components. Economic defeasanceSee: in-substance defeasance. Economic dependenceExists when the costs and/or revenues of one project depend on those of another. Economic earningsThe real flow of cash that a firm could pay out forever in the absence of any change in Economic exposureThe extent to which the value of the firm will change because of an exchange rate change. Economic incomeCash flow plus change in present value. economic integrationthe creation of multi-country markets Economic lifeThe period over which a company expects to be able to use an asset. economic order quantityOrder size that minimizes total inventory costs. Economic order quantity (EOQ)The order quantity that minimizes total inventory costs. economic order quantity (EOQ)an estimate of the number economic production run (EPR)an estimate of the number Economic rentsProfits in excess of the competitive level. Economic riskIn project financing, the risk that the project's output will not be salable at a price that will Economic surplusFor any entity, the difference between the market value of all its assets and the market Economic unionAn agreement between two or more countries that allows the free movement of capital, Economic Value Added (EVA)Operating profit, adjusted to remove distortions caused by certain accounting rules, less a charge economic value added (EVA)a measure of the extent to which income exceeds the dollar cost of capital; calculated economic value added (EVA)Term used by the consulting firm Stern Stewart for profit remaining after deduction of the cost economically reworkedwhen the incremental revenue from the sale of reworked defective units is greater than EconomicsThe study of the allocation and distribution of scare resources among competing wants. Effective Tax RateThe total tax provision divided by pretax book income from continuing Electronic Federal Tax Payment Systems (EFTPS)An electronic funds transfer system used by businesses to remit taxes to the government. Entitlement ProgramA program, such as social security, under which everyone meeting the eligibility requirements is entitled to receive benefits from the program, so that costs are not known in advance. Equivalent taxable yieldThe yield that must be offered on a taxable bond issue to give the same after-tax Except for opinionAn auditor's opinion reflecting the fact that the auditor was unable to audit certain areas Federal Unemployment Tax Act (FUTA)A federal Act requiring employers to pay a tax on the wages paid to their employees, which is then used to create a fixed overhead spending variancethe difference between the total actual fixed overhead and budgeted fixed overhead; Flexible Spending AccountA form of cafeteria plan allowing employees to pay Foreign tax creditHome country credit against domestic income tax for foreign taxes paid on foreign Guarantor programUnder the Freddie Mac program, the aggregation by a single issuer (usually an S&L) Harmless warrantWarrant that allows the user to purchase a bond only by surrendering an existing bond Imputation tax systemArrangement by which investors who receive a dividend also receive a tax credit for INCOME TAXWhat the business paid to the IRS. Income taxA government tax on the income earned by an individual or corporation. Income Tax ExpenseSee income tax provision. Income Tax ProvisionThe expense deduction from pretax book income reported on the Indirect Taxestaxes paid by consumers when they buy goods and services. A sales tax is an example. Inflation TaxThe loss in purchasing power due to inflation eroding the real value of financial assets such as cash. Informationless tradesTrades that are the result of either a reallocation of wealth or an implementation of an Integer programmingVariant of linear programming whereby the solution values must be integers. integer programminga mathematical programming technique in which all solutions for variables must be restricted to whole numbers Interest equalization taxtax on foreign investment by residents of the U.S. which was abolished in 1974. Interest tax shieldThe reduction in income taxes that results from the tax-deductibility of interest payments. interest tax shieldtax savings resulting from deductibility of interest payments. Investment SpendingExpenditures on capital goods including new housing. Financial ''investments" and sales of existing assets are not included. Investment tax creditProportion of new capital investment that can be used to reduce a company's tax bill Investment Tax CreditA reduction in taxes offered to firms to induce them to increase investment spending. Leading economic indicatorseconomic series that tend to rise or fall in advance of the rest of the economy. LesseeAn entity that leases an asset from another entity. LesseeThe entity that contracts to make rental payments to a lessor in exchange for the LesseeA person to whom a lease is granted; the user of the asset. LessorAn entity that leases an asset to another entity. LessorAn entity that leases an asset to another entity. LessorThe entity that rents property that it owns to a second party in exchange for a LessorA person who grants a lease; the owner of the asset. Limited-tax general obligation bondA general obligation bond that is limited as to revenue sources. Linear programmingTechnique for finding the maximum value of some equation subject to stated linear constraints. linear programminga method of mathematical programming used to solve a problem that involves an objective function and multiple limiting factors or constraints long-term variable cost a cost that was traditionally viewed as a fixed cost MacroeconomicsThe study of the determination of economic aggregates such as total output and the price level. Margin Tax RateThe tax rate applicable to the last unit of income. Marginal tax rateThe tax rate that would have to be paid on any additional dollars of taxable income earned. marginal tax rateAdditional taxes owed per dollar of additional income. Marginal Tax RatePercent of an increase in income paid in tax. Mathematical programmingAn operations research technique that solves problems in which an optimal mathematical programminga variety of techniques used MicroeconomicsThe study of firm and individual decisions insofar as they affect the allocation and distribution of goods and services. overhead spending variancethe difference between total actual overhead and total budgeted overhead at actual Payroll tax expenseThe amount of tax associated with salaries that an employer pays to governments (federal, state, and local). Payroll taxes payableThe amount of payroll taxes owed to the various governments at the end of a period. Personal tax view (of capital structure)The argument that the difference in personal tax rates between Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |