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

Horizontal equity is achieved when taxes are collected from those who benefit from the government expenditure of the tax revenue.

What is logrolling?

Congressman Gallstone seeks support from his colleagues for a bill he sponsors that will establish a new national park in his district.He offers to support Congresswoman Disrail's proposal to build a new library in her district in exchange for her vote for his national park bill.This is an example of

Consider the following methods of taxing a corporation's income: A.A flat tax, as opposed to a progressive tax, is levied on corporate profits. B.A system whereby a corporation calculates its annual profit and notifies each shareholder of her portion of the profits.The shareholder would then be required to include this amount as taxable income for her personal income tax.The corporation does not pay a tax. C.A system where the federal government continues to tax corporate income through the corporate income tax but allows individual taxpayers to receive, tax free, corporate dividends and capital gains. Which of the methods above would avoid double taxation?

The "ability-to-pay" principle of taxation is the normative idea that

Logrolling may result in

Table 18-10 Table 18-10 shows the income tax brackets and tax rates for single taxpayers in Bauxhall. -Refer to Table 18-10.A tax exemption is granted for the first $10,000 earned per year.Suppose you earn $75,000. a.What is the amount of taxes you will pay? b.What is your average tax rate? c.What is your marginal tax rate?

One important difference between the political process and the market process is that

Which of the following tax systems would help reduce income inequality the most?

A Lorenz curve summarizes the information provided by a Gini coefficient.

If you pay $2,000 in taxes on an income of $20,000, and a tax of $2,700 on an income of $30,000, then over this range of income the tax is

When considering changes in tax policy, economists usually focus on

Since lower-income people spend a larger proportion of their incomes on groceries than do higher-income people, if grocery stores were required by law to charge a 10-cent fee for disposable bags, this fee could be considered a

In 2014, which type of tax raised the most revenue for the U.S.federal government? Which type of tax raised the most revenue for state and local governments?

The distribution of income typically refers to how income is distributed across the population ________.Income mobility looks at how a person or family's income changes ________.

A Gini coefficient of ________ means that an income distribution is perfectly equal and a Gini coefficient of ________ means the income distribution is perfectly unequal.

Rent-seeking behavior, unlike profit-maximizing behavior in competitive markets, wastes society's scarce resources.

If the marginal tax rate is greater than the average tax rate, the tax structure is described as regressive.

Figure 18-1 -Refer to Figure 18-1.Of the tax revenue collected by the government, the portion borne by consumers is represented by the area

An income tax system is ________ if marginal tax rates increase as income increases.