Exam 18: Public Choice, Taxes, and the Distribution of Income

Congressman Flack votes for a program that will benefit the constituents of Congressman Walpole.The public choice model suggests that Flack's vote is best explained by which of the following?

In the United States, the largest source of funds for public schools is

According to public choice theory, policymakers

According to projections for 2017 by the Tax Policy Center, the 20 percent of U.S.taxpayers who make the highest incomes

Figure 18-1 -Refer to Figure 18-1.Area F + G represents

Which of the following is the source of revenue for Medicare and Social Security in the United States?

In 2017, President Trump proposed

Many state governments use lotteries to raise revenue.If a lottery is viewed as a tax, is it most likely a progressive tax or a regressive tax? What information would you need to determine whether the burden of a lottery is progressive or regressive?

A tax imposed by a state or local government on retail sales of most products is

Economists James Buchanan and Gordon Tullock are well-known for developing

A regressive tax is a tax for which people with lower incomes

Exempting food purchases from sales tax is consistent with the ability-to-pay principle, although not necessarily consistent with vertical equity.

A tax is efficient if

If you pay $2,000 in taxes on an income of $20,000, and a tax of $3,000 on an income of $30,000, then over this range of income the tax is

An average tax rate is calculated as

Article Summary State tax revenue from marijuana sales in Colorado has surpassed $500 million since its legalization in January 2014. Colorado has imposed three types of state taxes on marijuana: a 2.9% sales tax on medical marijuana, a 15% special sales tax for recreational use, and a 15% excise tax on wholesale marijuana transfers. About half of the accumulated tax revenue has gone to K-12 education, with over $100 million used to fund school construction projects. Twenty-five percent of the tax is being spent on substance abuse prevention and treatment programs. Source: Katelyn Newman, "Milestoned: Colorado Pot Tax Revenue Surpasses $500 M," usnews.com, July 20, 2017. -Refer to the Article Summary.Colorado taxes marijuana with a 15% sales tax on recreational-use buyers and a 15% wholesale excise tax on producers, or a total tax of 30% based on the initial selling price.Suppose the actual burden of the tax falls 70 percent on consumers and 30 percent on producers.In this case, consumers will actually bear the tax burden of ________ percent of the selling price and producers will actually bear the tax burden of ________ percent of the selling price.

Figure 18-4 -Suppose the United States has a Gini coefficient of 0.4 and Sweden has a Gini coefficient of 0.25.Which of the following statements is true?

A study by the Congressional Budget Office (CBO)regarding the corporate income tax included the following statement: "A corporation may write its check to the Internal Revenue Service for payment of the corporate income tax, but the money must come from somewhere..." The comments that followed this statement argued that