Exam 17: Taxation and Resource Allocation

Mrs.Dodge has $8 million in income and pays no income taxes.Her income is most likely

The benefits principle states that those who

Describe the U.S.Social Security system and explain how it is funded.

The ability to shift a tax burden depends on the relative elasticities of demand and supply for the taxed commodity.

Pay as you go financing for the Social Security System was abandoned in 1983.

The people most likely to pay little personal income tax to the U.S.government are

The second largest source of income for the federal budget is:

When the average tax rate rises as income rises, this is known as progressive taxation.

The Social Security system works exactly like any private retirement trust system.

The payroll tax is a

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

The more inelastic the demand for a product, the larger the share of the tax that will be paid by consumers.

Figure 18-3 -In which panel of Figure 18-3 would an excise tax be borne entirely by the supplier?

The federal government receives most of its revenue from three sources: personal income tax, corporate income tax, and payroll tax.

The corporate income tax is

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

The benefits principle states that the users of a service should pay for that service.

The idea of horizontal equity in taxation implies that

A factor that would reduce the ability of the Social Security system to maintain current benefit levels with constant tax rates is

The individual income tax, the inheritance tax, and the head tax are all examples of direct taxes.