Exam 17: Taxation and Resource Allocation

Payments to Social Security recipients would decline if the retirement age were lowered.

In 2005, the median income of renters was $26,317 and the median income of homeowners was $50,505.If imputed rent were added to household income or rent became deductible, the personal income tax would become

The incidence of a payroll tax is borne by both employers and employees.

Since the end of World War II, corporate income taxes have accounted for

Sometimes, the taxes with the smallest excess burden are:

Indirect taxes are levied on specific economic activities.

The notion that equally situated individuals should be taxed equally is referred to as

Vertical equity refers to the notion that equally situated individuals should be taxed equally.

Explain whether or not the ability-to-pay principle of tax equity is consistent with the benefits received principle of taxation.

Loopholes have the effect of

If two families are equally situated except that one rents and the other owns their home, the existing tax system will lead to

Which of the following taxes is least likely to be shifted?

The payroll tax is the federal government's biggest source of revenue.

A head tax is

Officially, the payroll tax is referred to as

The federal income tax is an example of a

The largest single source of revenue for the federal government is the

Employers can shift payroll taxes by substituting capital for labor.

Economists generally think that the ____ tax is among the best ways to raise revenue.

The major objective of the 1986 tax reform was to: (i) enhance efficiency by lowering marginal tax rates; (ii) enhance equity by closing "loopholes."