Exam 12: The Design of the Tax System

Sue earns income of $80,000 per year. Her average tax rate is 40 percent. Sue paid $4,500 in taxes on the first $30,000 she earned. What was the marginal tax rate on the rest of her income?

When interest income from savings is taxed, people will save

Many economists believe that the U.S. tax system would be made more efficient if the basis of taxation were changed so that people paid taxes, more so than they do now, based on their

In 2011, what percentage of federal government receipts came from corporate income taxes?

Which of the following in not a reason that a lump-sum tax imposes a minimal administrative burden on taxpayers?

Most people in the United States believe that our tax system should be both and .

Individual income taxes and social insurance taxes generate the highest tax revenue for the federal government.

A lump sum tax can never have horizontal equity.

A transfer payment is a government payment

Deadweight losses arise because a tax causes some individuals to change their behavior.

The average American pays a higher percent of his income in taxes today than he would have in the late 18th century.

Define the deadweight loss of a tax.

Suppose the country of Mankiwland has a new king, King Gregory. For the purpose of efficiency King Gregory's chief economic advisor would encourage him to design his country's tax system to minimize

Table 12-7 The following table shows the marginal tax rates for unmarried individuals for two years. -Refer to Table 12-7. For an individual who earned $35,000 in taxable income in both years, which of the following describes the change in the individual's marginal tax rate between the two years?

Scenario 12-1 Ken places a $20 value on a cigar, and Mark places a $17 value on it. The equilibrium price for this brand of cigar is $15. -Refer to Scenario 12-1. Suppose the government levies a tax of $1 on each cigar, and the equilibrium price of a cigar increases to $16. How much tax revenue is collected?

Suppose a country imposes a lump-sum income tax of $6,000 on each individual in the country. What is the average income tax rate for an individual who earns $60,000 during the year?

Which of the following are taxed?

In 2011, state and local government education spending was more than five times highway spending.

In 2011, social insurance taxes represented approximately what percentage of total receipts for the federal government?

Federal government spending on Social Security, Medicare, and Medicaid as a percentage of GDP rose from