Exam 6: Funding the Public Sector

-Jamal earns $160,000 per year and Josephina earns $80,000 per year. If Jamal pays $16,000 in income taxes and Josephina pays $5,000 in income taxes, the income tax system would be

Assume that Mr. Smith's income increased from $50,000 last year to $55,000 this year and that he paid an additional $2,000 in taxes. This would indicate that his marginal tax rate is

-Refer to the above figure. A unit tax has been placed on the good. The consumer pays what amount of the tax?

The average tax rate can be calculated by which of the following formulas?

According to dynamic tax analysis, will continuing to push up the tax lead to steady increases in tax revenues? Why?

-Which of the following are considered ad valorem taxes?

Suppose the tax amount on the first $10,000 income is $0; $2000 on the next $20,000; $4000 on the next $20,000; $6000 on the next $30,000; and 40 percent on any income over $80,000. Family A has income of $30,000 and Family B has income of $80,000. What is the marginal and average tax rate for each family?

Social Security contributions are

Which of the following is TRUE about the effects of an excise tax if consumers are totally unresponsive to price changes?

One criticism of the corporate income tax is that

Reduction or elimination of dividend taxes is designed, in part, to

Homer earns $10,000 per year. Each year he spends $5,000 and saves $5,000. He pays a 5 percent sales tax on all of his spending. Assuming the sales tax is the only tax he pays, his average tax rate out of his income is

-Refer to the above figures. Which panel represents the expected relationship between tax revenue and the sales tax rate if static tax analysis is used?

In a progressive income tax system

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

-Using the above figure, if the government levies a new unit tax in this market, S represents the original supply curve, and St represents the after-tax supply curve, then the after-tax price paid by consumers is the vertical distance from the origin to

Which one of the following statements is TRUE?

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

The marginal tax rate and the average tax rate are the same under a

The marginal tax rate can be calculated by which of the following formulas?