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Exam 12: The Design of the Tax System

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Question 191

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The most common explanation for Social Security payments accounting for a larger share of federal government expenditures is

A) increases in life expectancy.
B) people becoming eligible for Social Security benefits at an earlier age.
C) increases in birth rates among teenagers and the poor.
D) falling payroll tax receipts.

E) All of the above
F) A) and D)

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Question 192

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Table 12-4 -Refer to Table 12-4. What is the marginal tax rate for a person who makes $50,000?

A) 25%
B) 28%
C) 40%
D) 60%

E) All of the above
F) B) and D)

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Question 193

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Part of the deadweight loss from taxing labor earnings is that people

Table 12-9 United States Income Tax Rates for a Single Individual, 2012 and 2013. -Refer to Table 12-9. Harry is a single person whose taxable income is $35,000 a year. What happened to his marginal tax rate between 2012 and 2013?

Table 12-25 -Refer to Table 12-25. Which plan illustrates a proportional tax?

When the total surplus lost as a result of a tax is less than the amount of tax revenue collected by the government there is a deadweight loss.

Most analysts expect the largest federal spending category to continue to grow in importance for many years into the future. What category of spending is this?

Revenues from social insurance taxes are earmarked to pay for Social Security and Medicare.

Public schools, which educate most students through high school, are paid for primarily by

An income tax in which the average tax rate is the same for all taxpayers would be considered a

Table 12-21 The dollar amounts in the last three columns are the taxes owed under the three different tax systems. -Refer to Table 12-21. Which of the three tax systems is progressive?

What is the most efficient tax and why?

Tim earns income of $60,000 per year and pays $21,000 per year in taxes. Tim paid 20 percent in taxes on the first $30,000 he earned. What was the marginal tax rate on the second $30,000 he earned?

The largest source of income for the federal government is

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

Table 12-23 The dollar amounts in the last three columns are the taxes owed under the three different tax systems. -Refer to Table 12-23. Which of the three tax systems is progressive?

Scenario 12-2 Suppose that Bob places a value of $10 on a movie ticket and that Lisa places a value of $7 on a movie ticket. In addition, suppose the price of a movie ticket is $5. -Refer to Scenario 12-2. Suppose the government levies a tax of $1 on each movie ticket and that, as a result, the price of a movie ticket increases to $6.00. If Bob and Lisa both purchase a movie ticket, what is total consumer surplus for Bob and Lisa?

Resources devoted to complying with the tax laws are a type of deadweight loss.

The theory that the wealthy should contribute more to police protection than the poor because they have more to protect is based on

Table 12-9 United States Income Tax Rates for a Single Individual, 2012 and 2013. -Refer to Table 12-9. Darby is a single person whose taxable income is $320,000 a year. What happened to her average tax rate between 2012 and 2013?