Exam 18: Taxation and Public Expenditure

FIGURE 18-3 -Refer to Figure 18-3.Suppose that supply is perfectly elastic and the price of this good is initially P₃.If an excise tax raises the price from P₃ to P₄,the direct burden of the tax is

FIGURE 18-1 -Refer to Figure 18-1.A regressive tax is illustrated by curve(s)

An example of a government expenditure that is a transfer payment is

The efficiency argument for government provision of health care is that

The concept of vertical equity is derived from

Which of the following best describes the policy implications of a Laffer curve?

The Canadian federal government's system of "equalization payments"

Because government benefits paid by most universal programs are taxable,their net after-tax yield depends on the income of the recipient.Hence

Consider two families,each of whom earn total income of $80 000,but that are different in many other respects,such as the number of individuals to support.If each family is assessed income tax payable of $14 749,then it is very likely that the principle of ________ is being violated.

The Employment Insurance (EI)system operates whereby

Suppose an additional "special" tax of $0.10 per litre is imposed on the sale of gasoline in one province.Prior to the tax the price was $1.30 per litre and 10 million litres of gasoline are sold per day.After imposition of the tax,the new equilibrium price and quantity are $1.38 per litre and 9.6 million litres per day.What is the direct burden of this "special" tax?

The excess burden of a tax reflects a reduction of

FIGURE 18-1 -Refer to Figure 18-1.A progressive tax is illustrated by curve(s)

In Canada,public primary and secondary education

Consider the allocation of a nation's resources between additional public-sector spending versus additional private spending.James Buchanan argued that

One equity-based argument against government subsidies for post-secondary education is that

Interest earnings from accumulated savings are subject to personal income tax in Canada.As a result,

The table below shows 2015 federal income-tax rates in Canada. TABLE 18-1 -Refer to Table 18-1.If an individual had a taxable income of $120 000,how much federal tax would be due from the portion of earnings taxed at the maximum rate of 29%?

The two main competing goals in the design of a tax system are

The important debate about the appropriate balance between the public and private sectors