Exam 18: Taxation and Resource Allocation

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

Which of the following would be the most likely candidate for direct application of the benefits principle of taxation?

Discuss the three principles of equity applied to taxation in the text.

Taxes are either

If two families are identical with respect to size,income,general expenses,etc.,and are taxed equally,we say that there is

The incidence of a tax explains what group pays the burden of a tax.

Property taxes are the main source of funding for public schools.

A tax that reduces economic efficiency is always bad policy.

A congress member concerned about ensuring vertical equity in taxation would be most likely to argue for obtaining government revenue through a

Explain the concept of efficiency as it relates to taxation.

Rhode Island has enacted a substantial increase in the tax on employers that finances the workman's compensation system.For some employers,the tax is about $25 per $100 paid in wages.Employers claim they cannot afford to pay the tax.Under which of the following conditions will the actual burden of the tax fall on employers?

The percentage of the burden of an excise tax that is borne by sellers generally depends on the

Explain the excess burden of a tax on luxury yachts.

In Country X,the government requires employers to collect 9 percent of every employee's compensation as payroll tax.This is an example of

Loopholes increase the efficiency of the tax system by making taxpayers better off.

The ability-to-pay principle is most closely tied to the concept of

Edgar Browning and William Johnson,in a paper published in the Journal of Political Economy (1984),presented evidence that a one-dollar transfer to the bottom 40 percent of income distribution costs the top 60 percent nine dollars.If correct,this finding proves

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

The benefits principle states that those who