Exam 12: The Design of the Tax System

Most economists believe that a corporate income tax affects the stockholders of a corporation but not its employees or customers.

Table 12-9 United States Income Tax Rates for a Single Individual, 2012 and 2013. -Refer to Table 12-9. Jake is a single person whose taxable income is $20,000 a year. What is his average tax rate in 2013?

Table 12-2 -Refer to Table 12-2. Suppose that the government imposes a $2 tax on delights, causing the price to increase from $4.00 to $6.00. Deadweight loss arises because

Suppose a country imposes a lump-sum income tax of $5,000 on each individual in the country. What is the marginal income tax rate for an individual who earns $40,000 during the year?

For state and local governments, in 2011, sales taxes and property taxes made up approximately

Of the following countries, which country's government collects the largest amount of tax revenue as a percentage of that country's total income?

Scenario 12-4 A taxpayer faces the following tax rates on her income: 20 percent of the first $40,000 of her income; 30 percent of all her income above $40,000. -Refer to Scenario 12-4. The taxpayer faces a marginal tax rate of

A budget surplus occurs when government receipts fall short of government spending.

The largest budgetary expense for the federal government in 2011 was

You are trying to design a tax system that will simultaneously achieve both of the following goals: 1) a person with no income would pay no taxes, and 2) a high-income person would pay a higher fraction of income in taxes than a low-income person. Which of the following statements is correct?

In 2009, the lowest quintile of income earners paid about

When government receipts exceed total government spending during a fiscal year, the difference is

In 2011, which category represented the largest source of receipts for the U.S. federal government?

Suppose that Christine values a baseball hat at $20, and Mark values one at $18. The pretax price of a baseball hat is $14. The government imposes a $5 tax on baseball hats, which raises the price to $19. What is the deadweight loss from the tax?

When the government levies a tax on a corporation,

Under a regressive tax system, the marginal tax rate for high income taxpayers is

Table 12-4 -Refer to Table 12-4. What is the marginal tax rate for a person who makes $35,000?

Scenario 12-5 Senator Filch argues that a tax must be paid by people who benefit from government services. Senator Fudge argues that a tax must be paid in accordance with a person's ability to bear the tax burden. Senator Malfoy argues that people with a greater ability to pay a tax should pay a larger amount. Senator Moody argues that taxpayers with similar abilities to pay should contribute the same amount. -Refer to Scenario 12-5. Which Senator is advocating taxes based on the benefits principle?

Corporate profits distributed as dividends are

State and local governments receive the largest portion of their tax revenues from