Exam 6: Funding the Public Sector

Eight years ago you purchased an asset for $100,000 that has yielded a nominal capital gain of $30,000. If you sold the asset today, your inflation-adjusted capital gains would be zero due to inflation over the last eight years. The capital gains tax is 28 percent. If you sold the asset today your tax liability would be

For all employee earnings subject to Social Security taxes, what is the current Social Security tax rate for employers?

If the marginal tax rate is less than the average tax rate, the tax system is

In a progressive tax system

In order for the government to collect taxes, the government must first establish a(n)

Ad valorem taxation

The earnings that a corporation saves for investment in other productive activities are

The marginal tax rate is

Using the fiscal year 2014 estimates, the largest component of state and local revenue is the

When the profits of a corporation are taxed and the dividends paid to stockholders are also taxed

Ad valorem taxation means

What is a government's budget constraint in the long run as opposed to a given time period?

The Social Security program is financed directly from

The sum of public spending on goods and services and transfer payments during a given period cannot exceed tax revenues plus borrowed funds. This is the statement for

The main source of government funding is

The fact that every dollar that the government spends or transfers must ultimately be provided by the taxes and user charges it collects plus government borrowing is known as the

The value of goods, services, incomes or wealth subject to taxation is

The imposition of a new excise tax will

Current concern about Social Security is that

According to dynamic tax analysis, continually increasing the tax rate will eventually