Exam 20: Public Finance: Expenditures and Taxes

Just like businesses, the public sector uses resources in order to produce goods and services.

Between the government and households, money or funds tend to flow only in one direction: from households to government.

The federal personal income tax

Many states in the U.S. acquire significant amounts of funds from the following, except

The state and local tax structure is largely progressive.

The probable incidence of the tax on business property is on consumers.

Assume that in year 1 you pay an average tax rate of 20 percent on a taxable income of $20,000. In year 2, you pay an average tax rate of 25 percent on a taxable income of $30,000. Assuming no change in tax rates, the marginal tax rate on your additional $10,000 of income is

A tax structure is called progressive when

Suppose that a $0.75 tax is placed on gasoline. Under what circumstances will gasoline sellers end up shouldering the full burden of the tax?

Overall, the U.S. tax system (combined federal, state, and local) is

Which of the following statements is most consistent with the benefits-received principle of taxation?

(Consider This) Which of the following claims is not made by opponents of a value-added tax (VAT)?

If your income increases from $10,000 per year to $14,000 per year and your tax payment increases from $2,000 to $2,840, the marginal tax rate

The property tax may be regressive even though wealthy people own much more taxable property than do poor people. This possibility arises because

Government assumes some responsibility for providing a minimum standard of living for all citizens to compensate for the increase in income inequality caused by government tax revenues and expenditures.

In the U.S., the taxes mostly come from the rich and government spending mostly goes to programs that benefit the rich.

Which of the following is the largest expenditure item of local governments?

The marginal tax rate is the tax rate that applies to additional income.

In 2014, "Tax-Freedom Day" (the day average workers have earned enough to pay their tax bills) was

More than 50 percent of local and state employees are employed in the education sector.