Exam 12: The Design of the Tax System

Table 12-1 -Refer to Table 12-1. Assume that the price of a weekend ski pass is $45 and that the price reflects the actual unit cost of providing a weekend of skiing. Suppose the government imposes a tax of $12 on skiing, which raises the price of a weekend ski pass to $57. What is the value of the surplus that accrues to all four skiers from their weekend trip?

In 2010, the co­chairmen of President Obama's deficit reduction commission proposed curtailing or eliminating the mortgage interest deduction that millions of homeowner taxpayers receive every year. Economists who favor the proposal would argue that

Vertical equity and horizontal equity are associated with

Of all the taxes collected in the U.S. economy, what percentage is collected by the federal government?

In 2009, the top 1 percent of income earners made about

The tax that generates the most revenue for state and local government is the

Individual income taxes generate roughly 25% of the tax revenue for the federal government.

Suppose that the government taxes income in the following fashion: 20 percent of the first $50,000, 40 percent of the next $50,000, and 60 percent of all income over $100,000. Marshall earns $200,000, and Lily earns $600,000. Which of the following statements is correct?

The U.S. tax burden is

Suppose the government imposes a tax of 20 percent on the first $50,000 of income and 30 percent on all income above $50,000. What is the marginal tax rate when income is $60,000?

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. Total consumer surplus will fall from

Which of the following countries has lower total government tax revenue as a percentage of GDP than the United States?

Which of the following statements is correct?

In 2011, the largest source of receipts for state and local governments was corporate income taxes.

Over the past 100 years, as the U.S. economy's income has grown,

The largest budgetary expense for a typical state or local government is

Table 12-4 -Refer to Table 12-4. What is the marginal tax rate for a person who makes $130,000?

Which of the following is not an administrative burden of our tax system?

In the United States, all families pay the same proportion of their income in taxes.

Citizens expect the government to provide various goods and services making taxes