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

In the United States, the largest source of funds for public schools is

Which of the following is used to argue that the self-interest of public policymakers will often lead to actions that are inconsistent with the preferences of the voters they represent?

Table 18-1 Suppose $1 billion is available in the budget and Congress is considering allocating the funds to one of the following three alternatives: 1) Subsidies for education, 2) Research on Alzheimer's or 3) Increased border security. Table 18-1 shows three voters' rankings of the alternatives. -Refer to Table 18-1. Suppose a series of votes are taken in which each pair of alternatives is considered in turn. If the vote is between allocating funds to subsidies for education and research on Alzheimer's,

Which of the following summarizes the information provided by a Lorenz curve?

Table 18-11 Table 18-11 shows income distribution data for two countries. Use this data to answer the following questions. -Refer to Table 18-11. a. Draw a Lorenz curve for each country. b. Which country has the more equal distribution of income? c. Based on the Lorenz curve for the two countries, can you determine which country has the more progressive tax system? Explain your answer.

Financial contributions to the campaigns of members of Congress, state legislators and other elected officials by firms that seek special interest legislation that make the firms better off are

What is the difference between a marginal tax rate and an average tax rate? Which is more important in determining the impact of the tax system on economic behavior?

The public choice model assumes that government policy makers

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. -Between 1980 and 2011, income inequality in the United States has increased in part due to rapid technological change. How does technological change contribute to income inequality?

A marginal tax rate is

One argument advanced in favor of not increasing the income tax on individuals with high income is that

U.S. taxpayers spend many hours during the year maintaining records for tax purposes and preparing their income tax returns. This administrative cost

A tax imposed by a state or local government on retail sales of most products is

According to the ability-to-pay principle of taxation,

The corporate income tax is ultimately paid by all of the following except

Figure 18-1 -Refer to Figure 18-1. The sales tax revenue collected by the government is represented by the area

Consider a public good such as fire protection services. Rich people may benefit more than the poor from such a service because rich people stand to lose more from a fire that destroys property. In this case,

Policymakers focus on marginal tax rate changes when making changes in the tax code because the marginal tax rate