Exam 9: Public Finance and Public Choice

A flat tax plan with a standard deduction of $25,000 in income and a tax rate of 20% would require an individual earning $100,000 to pay $15,000 in income taxes.

Which of the following would be considered special interest group?

A flat tax would increase the possibilities of abuses and misrepresentations that go with tax deductions.

A special interest issue is best described as:

Which of the following is not an option that could be used to save Social Security?

Taxes for the most part are efficient because they retain incentives and align the values that buyers and sellers place on goods and services.

The U.S. federal government relies more heavily on ____ than any other government.

Rational voter ignorance can lead politicians to:

If Jim earns $300,000 this year and pays $75,000 in taxes and Sharon earns $80,000 this year and pays $20,000 in taxes, this tax system would appear to be

Payroll taxes are actually regressive taxes.

Which of the following accounted for the highest percentage of state and local spending?

Public choice theory assumes that voters, politicians, and other political participants are largely motivated by:

The ability to pay principle suggests that:

​Exhibit 9-1 A flat tax plan allows individuals to deduct a standard allowance of $25,000 from their wages. Assume that the flat tax rate is 12%. -Refer to Exhibit 9-1. How much income tax would you have to pay if you were earning $100,000 a year?

Public choice theory applies ____ principles to politics.

What are the advantages of a flat tax system?

Which of the following is potentially an option to save Social Security?

Government expenditures as a percentage of GDP in the U.S. increased from 1950 to 1975 but decreased sharply during the recession that began in 2008.

A progressive tax:

The U.S. federal government relies more heavily on sales taxes, excise taxes, and customs duties than nearly any other government in the world.