Exam 17: The Federal Budget- Taxes and Spending

Proponents of the United States moving from its current progressive tax system to a flat tax system argue that the efficiency gains associated with a flat tax system would mean that even people who are paying a higher tax rate,with increased economic growth,would be better off.Explain this argument.

Social Security benefits have become less generous over time.

Social Security operates on a "pay as you go" basis.What does this mean?

The Congressional Budget Office (CBO)estimates that if spending and taxes remain on their current trajectories,the U.S.debt-to-GDP ratio will approach 500% in the next 50 years.Discuss two of the main factors that are driving these CBO's predictions.

The two lowest marginal tax brackets in the United States are:

Total tax payments divided by total income is called the:

The main forces driving the projections of the debt-to-GDP ratio are:

If you purchased 10 shares of Goldman Sachs stock for $1,200 five years ago and decide to sell the stock today at a price of $1,500,how much will you owe in capital gains tax on your 10 shares? Assume the tax rate on capital gains is set at 15%.

Which country has the highest ratio of government spending to GDP?

The corporate income tax makes up nearly half of U.S.federal tax revenue.

If country A has mostly rich people and country B has mostly poor people and they both have progressive tax systems,we should expect tax revenues to be higher in country A.

Originally the alternative minimum tax was supposed to:

Since the mid-1950s,federal government taxation has been about _____ of GDP.

What kinds of tax deductions are described in the text? Describe a new deduction that was added since the 2008 recession began.

An increase in the capital gains tax will most likely:

In a progressive tax system,if a person moves from one income bracket to a higher income bracket:

The income tax exemption for each individual in 2014 is:

In the beginning of 2007,the interest rate paid on the national debt was 5%.In 2010 it was only 2%.Explain why the interest rate on the national debt fell so much between 2007 and 2010 even as the national debt increased dramatically.Do you expect it to continue to fall? Explain why or why not.

If tax rates are 10% on income up to $10,000,20% for income between $10,001 and $20,000,and 30% for income over $20,000,the total tax payment for a person earning $25,000 is approximately:

Suppose the tax rate on the first $20,000 of income is 0%;10% on the next $20,000 earned;and 20% on any additional income earned.The marginal tax rate for a person earning $30,000 is: