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

The complexity of the U.S. federal income tax system results in significant annual deadweight losses. The opportunity cost of the hours taxpayers spend on record keeping and completing their tax returns amounts to billions of dollars. a. If the tax system was simplified, how would this benefit the economy? b. Why hasn't the tax system been simplified?

The term "payroll taxes" is often used to refer to

All Gini coefficients must lie between 0 and 1. The lower the value,

The person or firm that pays a tax bears the burden of the tax.

Which of the following is an example of a federal mandate?

Vertical-equity is most closely associated with which of the following goals or principles?

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

The public choice model

The actual division of a tax between buyers and sellers in a market is the excess burden of the tax.

The largest source of revenue for the federal government of the United States is from

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

Studies by the U.S. Census Bureau have shown that

Income inequality in the United States has increased somewhat over the past 25 years. Two factors that appear to have contributed to this are

Article Summary In 2012, Colorado and Washington legalized marijuana for recreational use, and one of the major selling points in each state's pro-marijuana campaign was the possibility of generating millions of dollars in tax revenue from sales which could be used for funding general education. The Colorado legislature was weighing a proposal to tax marijuana at 30 percent, of which 15 percent would be a sales tax on consumers and 15 percent an excise tax on growers. Washington has set a tax rate of 44 percent on consumers and 25 percent each for growers and retailers. Since the legalization of marijuana is relatively new, projecting the economic impact of its sale is difficult, leading to many questions as to the quantities that will be produced and sold and what actual tax revenues will be generated. Source: Elizabeth Dwoskin, "Colorado and Washington Try to Figure Out How to Tax Marijuana," Bloomberg Businessweek, April 26, 2013. -Which of the following is not one of the concerns of some policymakers and economists that the increase in the share of income earned by the 1 percent is damaging to the country?

The largest source of tax revenue for state and local governments in the United States in 2012 was

Congressman Flack votes for a program that will benefit the constituents of Congressman Walpole. Which of the following explanations for Flack's vote is most consistent with the public choice model?

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

A statistical tool used to measure inequality is

What does a Lorenz curve illustrate?

Which of the following statements best represents the opinion of many economists regarding the impact that changes in tax laws have had on recent changes in income inequality in the United States?