Exam 17: Public Choice, Taxes, and the Distribution of Income

An analysis from the Congressional Budget Office showed that the primary source of income of the top 1 percent of income earners is

-Refer to Table 17-3. The table above outlines the rankings of three members of the U.S. Senate on three spending alternatives. Assume that Congress can spend additional revenue on only one of the three spending alternatives and that Bart, Lisa, and Maggie, all members of the Senate, participate in a series of votes in which they are to determine which of the spending alternatives should receive funding. Three votes will be taken: (1) Immigration Reform and Unemployment Benefits (2) Immigration Reform and Social Security Reform and (3) Unemployment Benefits and Social Security Reform. Show the results of each vote and determine whether the voting paradox will occur as a result of these votes.

In 2018, over 80 percent of the revenue of the U.S. federal government was raised through

A wealth tax like the one proposed by Senator Elizabeth Warren would perform best in meeting which of the following principles?

-Refer to Figure 17-8 to answer the following questions. a. Did the distribution of income become more equal in 2020 than it was in 2019, or did it become less equal? Explain. b. If area A = 1,900, area B = 450, and area C = 2,650, calculate the Gini coefficient for 2019 and the Gini coefficient for 2020.

Perhaps the greatest efficiency loss from a wealth tax would result from the ________ as a result of the tax.

In 2018, 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?

Figure 17-2 shows a demand curve and two sets of supply curves, one set more elastic than the other. -Refer to Figure 17-2. If the government imposes an excise tax of $1.00 on every unit sold, the consumer's burden of the tax

Last year, Anthony Millanti earned exactly $30,000 of taxable income. Assume that the income tax system used to determine Anthony's tax liability is progressive. The table below lists the tax brackets and the marginal tax rates that apply to each bracket. a. Draw a new table that lists the amounts of income tax that Anthony is obligated to pay for each tax bracket, and the total tax he owes the government. (Assume that there are no allowable tax deductions, tax credits, personal exemptions, or any other deductions that Anthony can use to reduce his tax liability). b. Determine Anthony's average tax rate.