Learning Objectives. Chapter 6. Funding the Public Sector. Introduction
|
|
- Jeremy Barrett
- 5 years ago
- Views:
Transcription
1 Copyright 2011 by Pearson Education, Inc. Chapter 6 Funding the Public Sector All rights reserved. Introduction In recent years, various U.S. politicians and pundits have called for boosts in tax rates for higher-income individuals and tax cuts for middle- and lower-income individuals How much should income tax rates vary across households based on their incomes? Are tax rates currently low for higher-income households relative to those faced by lower-income households? To evaluate these questions, you must understand more about the structure of tax systems 6-2 Learning Objectives Distinguish between average tax rates and marginal tax rates Explain the structure of the U.S. income tax system Understand the key factors influencing the relationship between tax rates and the tax revenues governments collect 6-3
2 Learning Objectives Explain how the taxes governments levy on purchases of goods and services affect market prices and equilibrium quantities Understand how the Social Security system works and explain the nature of the problems it poses for today s students 6-4 Chapter Outline Paying for the Public Sector Systems of Taxation The Most Important Federal Taxes Tax Rates and Tax Revenues Taxation from the Point of View of Producers and Consumers Financing Social Security 6-5 Did You Know That... Since 1986, Congress has added 3 million words in 14,000 amendments to U.S. tax laws? To obtain all the funds required to finance their operations, governments collect taxes from many different sources (property tax, sales tax, income tax, etc), hence the numerous words written into a variety of statutes 6-6
3 Paying for the Public Sector Three sources of government funding 1. Fees, or user charges 2. Taxes 3. Borrowing 6-7 Paying for the Public Sector Government Budget Constraint The limit on government spending and transfer payments Imposed by the fact that every dollar spent must be provided for by taxes 6-8 Policy Example: California Makes Payments with IOUs Instead of Cash In 2009, the state of California began issuing its own IOUs, known as registered warrants, when its indebtedness exceeded its capacity to make payments California s registered warrants are borrowings against future tax receipts, issued in a state of emergency to enable the state of California to satisfy its government budget constraint 6-9
4 Systems of Taxation Tax Base The value of goods, services, wealth, or incomes subject to taxation Tax Rate The proportion of a tax base that must be paid to a government as taxes 6-10 Policy Example: The Same Tax Rate, but Different Tax Bases for Different People City and county governments in Florida collect property taxes by applying a tax rate to assessed valuations of structures and surrounding properties Florida permits municipalities to establish a dualbracket system, which allows seasonal residents to be taxed at a higher rate than permanent residents Why do you suppose Florida chooses to value properties of permanent residents lower than those of seasonal residents? 6-11 Systems of Taxation Marginal Tax Rate The change in the tax payment divided by the change in income Marginal tax rate = Change in taxes due Change in taxable income 6-12
5 Systems of Taxation Tax Bracket A specified interval of income to which a specific and unique marginal tax rate is applied Average Tax Rate The total tax payment divided by total income 6-13 Systems of Taxation Proportional Taxation A tax system in which, regardless of an individual s income, the tax bill comprises exactly the same proportion 6-14 Systems of Taxation Proportional taxation Marginal tax rate = Average tax rate Income Rate Tax liability $10,000 20% $2,000 $100,000 20% $20,
6 Systems of Taxation Progressive Taxation A tax system in which, as income increases, a higher percentage of the additional income is paid as taxes 6-16 Systems of Taxation Progressive taxation: income tax Marginal tax rate > Average tax rate Income Rate Tax liability $0 $10,000 5% $500 $10,001 $20,000 10% $1,000 $20,001 $30,000 30% $3,000 $4, Systems of Taxation Regressive Taxation A tax system in which as more dollars are earned, the percentage of tax paid on them falls 6-18
7 Systems of Taxation Regressive taxation: Social Security Marginal tax rate < Average tax rate Income Rate Tax liability $50,000 10% $5,000 $100,000 5% $5, Policy Example: Millionaire Taxes Become the New Government Fad In the mid-2000s, California established a special 1 percent income-tax surcharge on people earning more than $1 million per year Shortly thereafter, New Jersey applied a similar tax surcharge for a special millionaire income-tax bracket, but decided that millionaires were people earning more than $500,000 per year 6-20 Policy Example: Millionaire Taxes Become the New Government Fad (cont d) A few years later, New York government officials established a millionaire tax surcharge to people earning more than $300,000 per year By the late 2000s, the idea of a millionaire tax surcharge was catching on in Washington, D.C., where House representatives introduced bills to apply millionaire federal-income-tax surcharges on annual incomes above $280,
8 The Most Important Federal Taxes Question What types of taxes do federal, state and local governments collect? Answers Federal government: individual income taxes, corporate income taxes, Social Security taxes, import and excise taxes State and local governments: sales taxes, property taxes, personal and corporate income taxes 6-22 Figure 6-1 Sources of Government Tax Receipts 6-23 The Most Important Federal Taxes The federal personal income tax Accounts for about 43.6% of all federal revenue All U.S. citizens, resident aliens, and most others required to pay (includes income earned abroad) Rates paid rise as income increases 6-24
9 Table 6-1 Federal Marginal Income Tax Rates 6-25 The Most Important Federal Taxes Arguments for the progressive tax Redistribution of income Ability to pay Benefits received Counterargument No strong evidence of redistribution 6-26 International Example: Defying One Agency, Illegal Immigrants Pay Taxes to Another Most estimates suggest that between 10 million and 15 million illegal immigrants reside in the United States, or 1 out of every 20 U.S. workers The Department of Homeland Security tries to keep illegal immigrants out Meanwhile, the Internal Revenue Service is making it easy for illegal immigrants to pay federal income taxes by obtaining a special taxpayer identification number that begins with a
10 The Most Important Federal Taxes Capital Gain The positive difference between the purchase price and the sale price of an asset You buy a share of stock for $5 and sell for $15: you have a capital gain of $10 Capital Loss The negative difference between the purchase price and the sale price of an asset 6-28 The Most Important Federal Taxes The corporate income tax Accounts for 12% of federal tax revenue and 2% of all state and local taxes collected Corporations are generally taxed on the difference between total revenues and expenses 6-29 Table 6-2 Federal Corporate Income Tax Schedule 6-30
11 The Most Important Federal Taxes Double taxation Corporation pays taxes on its profits Corporation declares a dividend on after-tax profits Dividend income is taxed 6-31 The Most Important Federal Taxes Retained Earnings Earnings that a corporation saves, or retains, for investment in other productive activities Earnings that are not distributed to stockholders Tax Incidence The distribution of tax burdens among various groups in society 6-32 The Most Important Federal Taxes Who really pays the corporate income tax? Tax incidence is distributed among Consumers Stockholders Employees 6-33
12 The Most Important Federal Taxes Social Security taxes Social Security rates today are imposed on earnings up to roughly $105,000 Contributions are 6.2% for employers and 6.2% for employees 6-34 The Most Important Federal Taxes Unemployment taxes Paid by employer 0.6% of first $7,000 of wages for employees earning more than $1,500 States may levy an additional tax up to 3% based on record of the employer 6-35 Tax Rates and Tax Revenues State and local governments Taxes imposed on goods and services yield more revenues than income taxes A fundamental issue is how to set tax rates to extract the largest possible payments 6-36
13 Tax Rates and Tax Revenues Sales Taxes Taxes assessed on the prices paid on a large set of goods and services Ad Valorem Taxation Assessing taxes by charging a tax rate equal to a fraction of the market price of each unit purchased 6-37 Tax Rates and Tax Revenues Static Tax Analysis Based on the assumption that changes in the tax rate leave the tax base unaffected Dynamic Tax Analysis Recognizes that higher tax rates may shrink the tax base 6-38 Tax Rates and Tax Revenues If the disincentive effects of higher tax rates are small, static analysis may give a fairly accurate estimate of the change in tax revenues resulting from a tax rate change As tax rates escalate, members of the public have a greater incentive to remove their activities from the tax base; a dynamic analysis would be necessary to determine the overall effect on government revenues 6-39
14 Figure 6-2 States with the Highest and Lowest Sales Tax Rates 6-40 E-Commerce Example: North Carolina Confronts the Logic of Dynamic Tax Analysis During the economic downturn of the late 2000s, steep reductions in incomes and consumer spending caused the income and sales tax bases of U.S. state governments to plummet The state of North Carolina attempted to boost its sales tax by implementing a law that requires Amazon, an Internet retailer, to collect sales taxes on all sales in that state Amazon responded by ending all sales through its affiliate program with residents in North Carolina, which caused the tax-base expansion that North Carolina had sought to achieve to disappear 6-41 Tax Rates and Tax Revenues Maximizing tax revenues Dynamic tax analysis predicts ever-higher tax rates bring about declines in the tax base At sufficiently high rates the government s tax revenues begin to fall off 6-42
15 Figure 6-3 Maximizing the Government s Sales Tax Revenues 6-43 International Policy Example: How Iceland Slashed a Tax Rate and Boosted Tax Revenues During the 1990s and 2000s, the Icelandic government gradually cuts in its corporate income tax rate from an initial rate of 45 percent to the current rate of 18 percent In the process, the government s inflation-adjusted revenues from corporate income taxation more than doubled 6-44 Taxation from the Point of View of Producers and Consumers Excise Tax A tax levied on purchases of a particular good or service Unit Tax A constant tax assessed on each unit of a good that consumers purchase 6-45
16 Taxation from the Point of View of Producers and Consumers Excise taxes on gasoline become added costs of production This shifts the supply curve up by the amount of the unit tax Consequently, the equilibrium price of gasoline rises and the equilibrium quantity declines 6-46 Figure 6-4 The Effects of Excise Taxes on the Market Supply and Equilibrium Price and Quantity of Gasoline 6-47 Taxation from the Point of View of Producers and Consumers Who Pays the Tax? In our example, the price that each consumer pays is $0.30 per gallon higher Therefore, consumers pay three-fourths of the excise tax and producers absorb the remainder 6-48
17 Financing Social Security Today s seniors are beneficiaries of rapidly increasing levels of federal spending Probably half of all federal spending will go to the elderly by 2025 Medicare and Social Security 6-49 Financing Social Security Social Security was founded in 1935, as the United States was recovering from the Great Depression Means of guaranteeing a minimum level of pension benefits Early recipients had high rates of return on their Social Security contributions 6-50 Financing Social Security Social Security Contributions Mandatory taxes paid out of workers wages and salaries Rate of Return Proportional annual benefit that results from making an investment Inflation-Adjusted Return Measured in terms of real goods and services, after effects of inflation taken out 6-51
18 Figure 6-5 Private Rates of Return on Social Security Contributions, by Year of Retirement 6-52 Financing Social Security Social Security faces Slow growth in membership Less workers per retiree Negative rates of return Benefits exceeding taxes 6-53 Financing Social Security What Will it Take to Salvage Social Security? There are five options to consider 1. Raise taxes 2. Reduce retirement benefit payouts 3. Reduce disability payments 4. Reform immigration policies 5. Find a way to increase the rate of return 6-54
19 Financing Social Security (cont d) Raise taxes increase the rate or expand the base Reduce benefit payouts Increase the eligibility age Cut benefits to nonworking spouses Introduce means testing 6-55 Financing Social Security Reduce disability benefits Tighten requirements, or separate the disability benefit from the Social Security system Reform immigration policies Changes in laws could offer hope of dealing with tax burdens and workforce shrinkage 6-56 Financing Social Security Increase Social Security s rate of return Inflation-adjusted return available on stocks 7 9% since the 1930s Uncertainty of returns Political pressure 6-57
20 Figure 6-6 Projected Social Security Rates of Return for Future Retirees 6-58 Issues and Applications: Progressive Income Taxation in the United States Just how progressive is the current U.S. income tax system? The average tax rate for the lower half of the income distribution of taxpayers is about 3% The average tax rate paid by those in the top half of income earners paying taxes is more than 10% higher 6-59 Issues and Applications: Progressive Income Taxation in the United States The tax rate rises as incomes increase, so the U.S. income-tax system is clearly progressive in the upper range of incomes Lower income people typically pay a very small share of the total tax payments The U.S. has a progressive tax system 6-60
21 Figure 6-7 Average Tax Rates and Shares of U.S. Federal Income Taxes for Different Income Groups 6-61 Summary Discussion of Learning Objectives Average tax rates versus marginal tax rates Average tax rate is the ratio of total tax payments to total income Marginal tax rate is the change in tax payments, induced by a change in total taxable income: applies to the last dollar earned 6-62 Summary Discussion of Learning Objectives The U.S. income tax system taxes personal and business income A tax system is progressive when marginal tax rate increases as income rises Contrasts with regressive system, in which higher-income earners pay lower marginal tax rates Under proportional taxation, the marginal and average rate are equal 6-63
22 Summary Discussion of Learning Objectives The relationship between tax rates and tax revenues Static tax analysis assumes that the tax base does not respond significantly to an increase in the tax rate Dynamic tax analysis reveals how an increase in the tax rate causes the tax base to decline 6-64 Summary Discussion of Learning Objectives How taxes on purchases of goods and services affect market prices and quantities A tax collected from the seller of a good will shift the supply curve up To the extent that the price rises, consumers pay a portion of the tax and sellers pay the remainder 6-65 Summary Discussion of Learning Objectives How Social Security works and why it poses problems for today s students Social Security benefits are paid from current taxes The current schedule of benefits for retirees will be an overwhelming tax burden for future generations 6-66
23 Summary Discussion of Learning Objectives What will it take to salvage Social Security? 1. Raise taxes 2. Reduce retirement benefit payouts 3. Reduce disability payments 4. Reform immigration policies 5. Find a way to increase the rate of return 6-67
Chapter 6. Introduction. Learning Objectives. Funding the Public Sector. Distinguish between average tax rates and marginal tax rates
Chapter 6 Funding the Public Sector Introduction Do you think that so-called private accounts could help save the Social Security system? Is the Social Security system really in trouble? Copyright 2008
More informationIntroduction. Learning Objectives. Learning Objectives. Economics Today Twelfth Edition. Chapter 6 Taxes, Transfers, and Public Spending
Roger LeRoy Miller Economics Today Twelfth Edition Chapter 6 Taxes, Transfers, and Public Spending Introduction Educational vouchers allow parents and students to choose among different primary and secondary
More informationFunding the Public Sector
6 Funding the Public Sector Learning Objectives After you have studied this chapter, you should be able to 1. define marginal and average tax rates, proportional, progressive, and regressive taxation,
More informationChapter 14: Taxes and Government Spending Section 1
Chapter 14: Taxes and Government Spending Section 1 Objectives 1. Identify the sources of the government s authority to tax. 2. Describe types of tax bases and tax structures. 3. List the characteristics
More informationAP Microeconomics Chapter 16 Outline
I. Learning objectives In this chapter students should learn: A. The main categories of government spending and the main sources of government revenue. B. The different philosophies regarding the distribution
More informationWhat Are Taxes? Chapter 14 Section Main Menu
What Are Taxes? How are taxes used to fund government programs? What are three types of tax structures? What are the characteristics of a good tax? Who bears the burden of a tax? Funding Government Programs
More informationApplication: The Costs of Taxation
Application: The Costs of Taxation Chapter 8. Application: The Costs of Taxation Welfare economics is the study of how the allocation of resources affects economic well-being. Buyers and sellers receive
More informationApplication: The Costs of Taxation
Application: The Costs of Taxation Chapter 8 Copyright 2001 by Harcourt, Inc. All rights reserved. Requests for permission to make copies of any part of the work should be mailed to: Permissions Department,
More informationChapter 14. Introduction. Learning Objectives. Deficit Spending and The Public Debt. Explain how federal government budget deficits occur
Chapter 14 Deficit Spending and The Public Debt Introduction In adopting the euro, European nations agreed to abide by the Stability and Growth Pact. The pact called for limitations on government spending
More information2007 Thomson South-Western
Application: The Costs of Taxation Welfare economics is the study of how the allocation of resources affects economic wellbeing. Buyers and sellers receive benefits from taking part in the market. The
More informationThe Future of Social Security
Statement of Douglas Holtz-Eakin Director The Future of Social Security before the Special Committee on Aging United States Senate February 3, 2005 This statement is embargoed until 2 p.m. (EST) on Thursday,
More informationLecture 8. Application: the cost of taxation
Lecture 8 Application: the cost of taxation By the end of this lecture, you should understand: how taxes reduce consumer and producer surplus the meaning and causes of the deadweight loss from a tax why
More informationQuiz #1 Week 03/01/2009 to 03/07/2009
Quiz #1 Week 03/01/2009 to 03/07/2009 You have 25 minutes to answer the following 14 multiple choice questions. Record your answers in the bubble sheet. Your grade in this quiz will count for 1% of your
More informationChapter 12: Design of the Tax System. Historical Context
Chapter 12: Design of the Tax System Purpose: Address the tax system and how the U.S. government raises and spends money along with the difficulty of making a tax system both efficient and equitable. Quick
More informationChapter 12 TAXES AND TAX POLICY Principles of Economics in Context (Goodwin et al.)
Chapter 12 TAXES AND TAX POLICY Principles of Economics in Context (Goodwin et al.) Chapter Summary This chapter starts out with a theory of taxes using the supply-and-demand model. Referring back to the
More informationOur Tax System Revealed. Lee R. Nackman, Ph.D. October 24, 2018
Our Tax System Revealed Lee R. Nackman, Ph.D. October 24, 2018!1 Topics Tax System Desiderata Follow the Money! Social Security Payroll Taxes Sales Taxes Federal Individual Income Taxes The Big Picture:
More informationCHAPTER 1 Introduction to Taxation
CHAPTER 1 Introduction to Taxation CHAPTER HIGHLIGHTS A proper analysis of the United States tax system begins with an examination of the tax structure and types of taxes employed in the United States.
More informationEcon Ch. 9 Practice Test II
Econ Ch. 9 Practice Test II Multiple Choice Identify the choice that best completes the statement or answers the question. 1. The incidence of a tax can more effectively be shifted from the supplier to
More information14-1: How Taxes Work NOTES
14-1: How Taxes Work NOTES Learning Target 1. I will demonstrate my understanding of the different types of taxes and what tax revenue is used for. Government Revenue Tax: a mandatory payment to a local,
More informationThis publication is a slight revision of four news releases recently made available to Oregon newspapers.
Understanding Oregon's Four 1986 Tax Initiatives This publication is a slight revision of four news releases recently made available to Oregon newspapers. Part 1. How Does the Current System Work? Part
More informationFASB Looks to. Leslie F. Seidman, FASB Chair. Annual Tax Update Marriage and Taxes Estate Tax Portability Tax Preferences for Education
www.cpaj.com December 2011 FASB Looks to the Future Leslie F. Seidman, FASB Chair Annual Tax Update Marriage and Taxes Estate Tax Portability Tax Preferences for Education T A X A T I O N federal taxation
More informationIntroduction. Learning Objectives. Chapter 13. Fiscal Policy
Copyright 2011 by Pearson Education, Inc. Chapter 13 Fiscal Policy All rights reserved. Introduction Government expenditures on health care services have grown significantly since federal and state government
More informationCh In other countries the replacement rate is often higher. In the Netherlands it is over 90%. This means that after taxes Dutch workers receive
Ch. 13 1 About Social Security o Social Security is formally called the Federal Old-Age, Survivors, Disability Insurance Trust Fund (OASDI). o It was created as part of the New Deal and was designed in
More informationWays to Offset Regressive Impact of Consumption Tax Hikes
Legal and Tax Report 26 June 2012 (No. of pages: 11) Ways to Offset Regressive Impact of Consumption Tax Hikes On the regressive impact of consumption tax, refundable tax credits, and tax rate reductions
More information14.1 Public Goods and Taxation 14.2 Federal, State, and Local Budgets 14.3 Economics of Public Choice
CHAPTER 14 Government Spending, Revenue, and Public Choice 14.1 Public Goods and Taxation 14.2 Federal, State, and Local Budgets 14.3 Economics of Public Choice 1 CONTEMPORARY ECONOMICS: LESSON 14.1 CHAPTER
More informationTHE GEORGIA INDIVIDUAL TAX : CURRENT STRUCTURE AND IMPACT OF PROPOSED CHANGES. Barbara M. Edwards
THE GEORGIA INDIVIDUAL TAX : CURRENT STRUCTURE AND IMPACT OF PROPOSED CHANGES Barbara M. Edwards FRP Report No. 12 April 1998 THE GEORGIA INDIVIDUAL INCOME TAX: CURRENT STRUCTURE AND IMPACT OF PROPOSED
More informationHOW SHOULD GOVERNMENTS STRUCTURE THE TAX SYSTEM?
LESSON 11 HOW SHOULD GOVERNMENTS STRUCTURE THE TAX SYSTEM? 143 LESSON 11 HOW SHOULD GOVERNMENTS STRUCTURE THE TAX SYSTEM? INTRODUCTION Collecting revenue through taxation creates complicated and controversial
More information1. STUDENTS WILL BE ABLE TO DEFINE WHAT A TAX IS AND EXPLAIN WHY WE MUST HAVE TAXES
LIGHTHOUSE CPA SOCIAL SCIENCES DEPARTMENT AP ECONOMICS STUDY GUIDE # 17 - TAXES & GOVERNMENT SPENDING CHAPTER LEARNING OBJECTIVES STUDENTS WILL BE ABLE TO DEFINE WHAT A TAX IS AND EXPLAIN WHY WE MUST HAVE
More informationWould the Senate Democrats proposed excise tax on highcost employer-paid health insurance benefits be progressive?
Citizens for Tax Justice December 11, 2009 Would the Senate Democrats proposed excise tax on highcost employer-paid health insurance benefits be progressive? Summary Senate Democrats have proposed a new,
More informationCRS Report for Congress Received through the CRS Web
Order Code RL33387 CRS Report for Congress Received through the CRS Web Topics in Aging: Income of Americans Age 65 and Older, 1969 to 2004 April 21, 2006 Patrick Purcell Specialist in Social Legislation
More information4/5/2012. Chapter 16: Financing Government Section 1
Chapter 16: Financing Government Section 1 Objectives 1. Explain how the Constitution gives Congress the power to tax and places limits on that power. 2. Identify the most significant federal taxes collected
More informationTest Yourself: Income, Transfers and Taxes
Test Yourself: Income, Transfers and Taxes I wish it need not have happened in my time," said Frodo. "So do I," said Gandalf, "and so do all who live to see such times. But that is not for them to decide.
More informationThe theory of taxation/2 (ch. 19 Stiglitz, ch. 20 Gruber, ch.14 Rosen)) Taxation and economic efficiency
The theory of taxation/2 (ch. 19 Stiglitz, ch. 20 Gruber, ch.14 Rosen)) Taxation and economic efficiency 1 Taxation and economic efficiency Most taxes introduce deadweight losses because they alter relative
More informationINTRODUCTION TAXES: EQUITY VS. EFFICIENCY WEALTH PERSONAL INCOME THE LORENZ CURVE THE SIZE DISTRIBUTION OF INCOME
INTRODUCTION Taxes affect production as well as distribution. This creates a potential tradeoff between the goal of equity and the goal of efficiency. The chapter focuses on the following questions: How
More informationChapter 12. The Design of the Tax System. Introduction. Introduction. In this chapter, look for the answers to these questions:
Chapter 12. The Design of the Tax System Introduction One of the Ten Principles from Chapter 1: A government can sometimes improve market outcomes. providing public goods regulating use of common resources
More informationInstitute on Taxation and Economic Policy P Street, NW, Washington, DC (202)
ITEP Institute on Taxation and Economic Policy 1616 P Street, NW, Washington, DC 20036 (202) 299-1066 www.itepnet.org An Analysis of the Proposed Ohio Capital Gains Tax Cut July 2006 Introduction & Summary:
More informationDuring fiscal year 2004, the federal government
Preview Objectives After studying this section you will be able to: 1. Describe the process of paying individual income. 2. Explain the basic characteristics of corporate income. 3. Understand the purpose
More informationAny book of Microeconomics can be useful: Microeconomics and Behavior, R. H. Frank Microeconomic Analysis (H. Varian) 2/22/2016 1
Any book of Microeconomics can be useful: Microeconomics and Behavior, R. H. Frank Microeconomic Analysis (H. Varian) 2/22/2016 1 Basics of the economics of taxation Taxation in competitive market Commodity
More informationCRS Report for Congress
Order Code RL32477 CRS Report for Congress Received through the CRS Web Social Security: The Public Servant Retirement Protection Act (H.R. 4391/S. 2455) July 19, 2004 Laura Haltzel Specialist in Social
More informationCHAPTER 17: PUBLIC CHOICE THEORY AND THE ECONOMICS OF TAXATION
CHAPTER 17: PUBLIC CHOICE THEORY AND THE ECONOMICS OF TAXATION Introduction As we have seen, government plays an important role in addressing market failures. But it also plays a significant role in taxation
More informationJune 19, I hope this information is helpful to you. The CBO staff contacts are Frank Sammartino and Terry Dinan. Sincerely,
CONGRESSIONAL BUDGET OFFICE U.S. Congress Washington, DC 20515 Douglas W. Elmendorf, Director June 19, 2009 Honorable Dave Camp Ranking Member Committee on Ways and Means U.S. House of Representatives
More informationSocial Security and your retirement
Social Security and your retirement Important information for investors planning Social Security will not and was never designed to provide all of the income you ll need to live comfortably during retirement.
More informationTax Cut by Income Group, Fully Phased-In
Testimony of Michael P. Ettlinger, Tax Policy Director, The Institute on Taxation and Economic Policy, before the Rhode Island Senate Select Committee. October 7, 1999 Analysis of Proposed Tax Cut Good
More informationChapter 14 Deficit Spending and the Public Debt
Chapter 14 Deficit Spending and the Public Debt Learning Objectives After you have studied this chapter, you should be able to 1. define government budget deficits and surpluses, a balanced budget, the
More informationOPENING THE DOOR TO EXPANDED RETIREMENT SAVINGS OPPORTUNITIES:
OPENING THE DOOR TO EXPANDED RETIREMENT SAVINGS OPPORTUNITIES: EXPLORING ROTH AND AFTER-TAX FEATURES IN DC PLANS Not FDIC Insured May Lose Value Not Bank Guaranteed RETIREMENT CONTENTS 1 Executive Summary
More information2003 Minnesota Tax Incidence Study
2003 Minnesota Tax Incidence Study (Revised using February 2003 Forecast) An analysis of Minnesota s household and business taxes. March 2003 2003 Minnesota Tax Incidence Study Analysis of Minnesota s
More informationAUGUST 2012 An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022 Provided as a convenience, this screen-friendly version is identic
AUGUST 2012 An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022 Provided as a convenience, this screen-friendly version is identical in content to the principal, printer-friendly version
More informationPERSONAL INCOME TAXES IN THAILAND THE UNITED STATES. 1. The Tax Base: Basic Rules for Calculating Taxable Income and Why Much of Income Is Untaxed
19/11/2015 C h a p t e r 14 PERSONAL INCOME TAXES IN THAILAND THE UNITED STATES Public Finance, 10 th Edition David N. Hyman Adapted by Chairat Aemkulwat for Public Economics 2952331 Outline: Chapter 14
More informationWe reviewed past studies and recommendations on property tax reform, and established the following series of principles to guide our recommendations:
Report of the Property Tax Reform Task Force of the New Jersey State League of Municipalities: The Case for a Major Property Tax Cut, and an Examination of Policy Options New Jersey needs to cut property
More information2009 Minnesota Tax Incidence Study
2009 Minnesota Tax Incidence Study (Using November 2008 Forecast) An analysis of Minnesota s household and business taxes. March 2009 For document links go to: Table of Contents 2009 Minnesota Tax Incidence
More informationnewsletter Distribution of tax burden in Croatia ivica urban Institute of Public Finance
newsletter an occasional publication of the institute of public finance Zagreb Smičiklasova 21 office@ijf.hr www.ijf.hr phone: +385 (0)1 4886 444 No. 58 June 2011 issn 1333-4263 Distribution of tax burden
More informationSocial Security and Your Retirement
Social Security and Your Retirement Important information for investors planning Social Security will not and was never designed to provide all of the income you ll need to live comfortably during retirement.
More informationDynamic Change, Economic Fluctuations, and the AD-AS Model
Dynamic Change, Economic Fluctuations, and the AD-AS Model Full Length Text Part: Macro Only Text Part: 3 Chapter: 10 3 Chapter: 10 To Accompany Economics: Private and Public Choice 13th ed. James Gwartney,
More informationDoes Congress decide who pays the taxes? 2013 Pearson
Does Congress decide who pays the taxes? Taxes 8 When you have completed your study of this chapter, you will be able to CHAPTER CHECKLIST 1 Explain how taxes change prices and quantities, are shared by
More informationECON 1100 Global Economics (Fall 2013) The Distribution Function of Government portions for Exam 4
ECON 1100 Global Economics (Fall 2013) The Distribution Function of Government portions for Exam 4 Relevant Readings from the Required Textbooks: Economics Chapter 12, Income Distribution and Poverty Problems
More informationExpanding the Social Security Benefit Exemption Under the Iowa Income Tax
The Iowa Policy Project Policy Brief January 16, 2001 Expanding the Social Security Benefit Exemption Under the Iowa Income Tax by Peter S. Fisher Iowa currently exempts the majority of retirees from paying
More informationSTATE AND LOCAL TAXES SPENDING GUIDED READING
page 1 / 5 page 2 / 5 state and local taxes pdf Download FISCAL FACT No. 572: State and Local Sales Tax Rates, 2018 (PDF) Retail sales taxes are one of the more transparent ways to collect tax revenue.
More informationThe Distribution of Federal Taxes, Jeffrey Rohaly
www.taxpolicycenter.org The Distribution of Federal Taxes, 2008 11 Jeffrey Rohaly Overall, the federal tax system is highly progressive. On average, households with higher incomes pay taxes that are a
More informationRecitation #6 Week 02/15/2009 to 02/21/2009. Chapter 7 - Taxes
Recitation #6 Week 02/15/2009 to 02/21/2009 Chapter 7 - Taxes Exercise 1. The government wishes to limit the quantity of alcoholic beverages sold and therefore is considering the imposition of an excise
More informationASSEMBLY, No. 15 STATE OF NEW JERSEY 217th LEGISLATURE
LEGISLATIVE FISCAL ESTIMATE ASSEMBLY COMMITTEE SUBSTITUTE FOR ASSEMBLY, No. 15 STATE OF NEW JERSEY 217th LEGISLATURE DATED: JUNE 1, 2016 SUMMARY Synopsis: Type of Impact: Agencies Affected: Raises minimum
More information2011 Minnesota Tax Incidence Study
2011 Minnesota Tax Incidence Study (Using February 2011 Forecast) An analysis of Minnesota s household and business taxes. March 2011 For document links go to: Table of Contents 2011 Minnesota Tax Incidence
More informationChapter 15. Government Spending and its Financing Pearson Addison-Wesley. All rights reserved
Chapter 15 Government Spending and its Financing Chapter Outline The Government Budget: Some Facts and Figures Government Spending, Taxes, and the Macroeconomy Government Deficits and Debt Deficits and
More informationWhat the New Tax Laws Mean to You
What the New Tax Laws Mean to You The American Taxpayer Relief Act of 2012 and other 2013 tax provisions January 2013 White Paper AN OVERVIEW OF THE AMERICAN TAXPAYER RELIEF ACT OF 2012 AND OTHER 2013
More informationSample Exam Questions/Chapter 7
Sample Exam Questions/Chapter 7 1. A tax of $20 on an income of $200, $40 on an income of $300, and $80 on an income of $400 is: A) progressive. B) proportional. C) regressive. D) constant-rate. 2. A tax
More informationUnderstanding Social Security
Understanding Social Security Guide for Advisors A Look at the Big Picture For Financial Professional Use Only. Not for Use With Consumers. Is Your Clients Picture of Retirement Incomplete? Building retirement
More informationIntroduction. Learning Objectives. Chapter 13. Fiscal Policy
Chapter 13 Fiscal Policy Introduction Government expenditures on health care services have grown significantly since federal and state government began covering payments for various types of health-related
More informationChapter 10 The Government in the Economy: Taxation and Regulation. Outline. Taxation and Government Spending in the United States.
in Part II: Foundation of Microeconomics 5. s and Incentives 6. Sellers and Incentives 7. Perfect Competition and the Invisible Hand 8. Trade 9. Externalities and Public Goods 10. in Taxation and W3 Political
More informationChapter 1 Introduction to Federal Taxation and Understanding the Federal Tax Law
1 Introduction to Federal Taxation and Understanding the Federal Tax Law SUMMARY OF CHAPTER This chapter presents information on the magnitude of federal taxes collected and on taxpayer obligations. Also,
More informationAt the end of Class 20, you will be able to answer the following:
1 Objectives for Class 20: The Tax System At the end of Class 20, you will be able to answer the following: 1. What are the main taxes collected at each level of government? 2. How do American taxes as
More informationState Handbook of Economic, Demographic, and Fiscal Indicators Georgia. by David Baer PUBLIC POLICY INSTITUTE AARP
State Handbook of Economic, Demographic, and Fiscal Indicars 2006 Georgia by David Baer PUBLIC POLICY INSTITUTE AARP Introduction The State Handbook of Economic, Demographic, and Fiscal Indicars 2006 represents
More informationFUNDING A SOUND BASIC EDUCATION FOR ALL NEW YORK S CHILDREN Fiscal Policy Institute
FUNDING A SOUND BASIC EDUCATION FOR ALL NEW YORK S CHILDREN Fiscal Policy Institute In Campaign for Fiscal Equity vs. State of New York, decided in 2003, the Court of Appeals, New York's highest court,
More informationState Tax Relief for the Poor
State Tax Relief for the Poor David S. Liebschutz and Steven D. Gold T his paper summarizes highlights of the book State Tax Relief for the Poor by David S. Liebschutz, associate director of the Center
More informationTaxes and Spending. Mostly Agree
Taxes and Spending ESSENTIAL QUESTION: Who and what should be taxed? Mark the box that reflects your opinion about each statement. Completely Agree Mostly Agree Mostly Disagree Completely Disagree Businesses
More informationEssential Questions Fiscal Policy
Essential Questions Fiscal Policy -What is the role of Government in the Macro Economy? -What are the basic causes of Business Fluctuations? -What is fiscal policy and how does gov t use fiscal tools to
More informationCASE FAIR OSTER PRINCIPLES OF MICROECONOMICS E L E V E N T H E D I T I O N. PEARSON 2014 Pearson Education, Inc.
PRINCIPLES OF MICROECONOMICS E L E V E N T H E D I T I O N CASE FAIR OSTER PEARSON Prepared by: Fernando Quijano w/shelly 1 of Tefft 11 2 of 30 Public Finance: The Economics of Taxation 19 CHAPTER OUTLINE
More informationDistributional Impact of Social Security Reforms: Summary
Distributional Impact of Social Security Reforms: Summary by Barry Bosworth Gary Burtless and Claudia Sahm THE BROOKINGS INSTITUTION 1775 Massachusetts Ave. N.W. Washington, DC 20036 August 22, 2000 Prepared
More informationInequality and Redistribution
Inequality and Redistribution Chapter 19 CHAPTER IN PERSPECTIVE In chapter 19 we conclude our study of income determination by looking at the extent and sources of economic inequality and examining how
More information2007 Minnesota Tax Incidence Study
2007 Minnesota Tax Incidence Study (Using November 2006 Forecast) An analysis of Minnesota s household and business taxes. March 2007 2007 Minnesota Tax Incidence Study Analysis of Minnesota s household
More informationCH 8. Name: Class: Date: Multiple Choice Identify the choice that best completes the statement or answers the question.
Class: Date: CH 8 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Tax incidence is the a. burden buyers have to absorb from a tax on goods and services.
More informationIncome Distribution and Poverty
C H A P T E R 15 Income Distribution and Poverty Prepared by: Fernando Quijano and Yvonn Quijano Income Distribution and Poverty This chapter focuses on distribution. Why do some people get more than others?
More informationS&P Capital IQ Financial Communications Tax Guide. What You Need to Know About the New Rules
S&P Capital IQ Financial Communications 2013 Tax Guide What You Need to Know About the New Rules Tax Guide 2013 This guide is not intended to be tax advice and should not be treated as such. Each individual
More informationOVERVIEW OF THE FEDERAL TAX SYSTEM AS IN EFFECT FOR 2013
OVERVIEW OF THE FEDERAL TAX SYSTEM AS IN EFFECT FOR 2013 Prepared by the Staff of the JOINT COMMITTEE ON TAXATION January 8, 2013 JCX-2-13 CONTENTS Page INTRODUCTION... 1 I. SUMMARY OF PRESENT-LAW FEDERAL
More informationA Dynamic Analysis of President Obama s Tax Initiatives
FISCAL FACT Mar. 2015 No. 455 A Dynamic Analysis of President Obama s Tax Initiatives By Stephen J. Entin Senior Fellow Executive Summary President Obama proposed a long list of changes to the tax system
More informationUnit 6 The Role of Government in the Economy
Macroeconomics Unit 6 The Role of Government in the Economy Government Spending Governments undertake projects for the public good, such as this road construction project. They raise the necessary funds
More informationHistorical Effective Tax Rates, Preliminary Edition
Historical Effective Tax Rates, 1979- Preliminary Edition The Congress of the United States Congressional Budget Office NOTES Numbers in the text and tables may not add up to totals because of rounding.
More informationTax Plan Needs Course Correction House Transportation Package Leaves out New Revenues, Could Harm Key Services
Policy Bill Analysis Report Tax Plan Needs Course Correction House Transportation Package Leaves out New Revenues, Could Harm Key Services By Wesley Tharpe, Policy Analyst Georgia needs a sustained commitment
More informationChapter 9 Sources of Government Revenue
Chapter 9 Sources of Government Revenue Did You Know? To help the ailing yacht industry, which suffered great losses after the 1991 luxury tax was imposed, Representative Patrick J. Kennedy introduced
More informationESTATE TAXES, DEFICITS, AND BUDGET IMPLICATIONS
October 2011 No. 105 ESTATE TAXES, DEFICITS, AND BUDGET IMPLICATIONS Stephen J. Entin President and Executive Director Institute for Research on the Economics of Taxation Sponsored by the American Family
More informationPublic Sector Economics Test Questions Randall Holcombe Fall 2017
Public Sector Economics Test Questions Randall Holcombe Fall 2017 1. Governments should act to further the public interest. This statement would probably receive general agreement, but it is not always
More informationTHE TAX POLICY. BRIEFING BOOK A Citizens' Guide for the 2008 Election and Beyond
BACKGROUND: THE NUMBERS I-1-1 THE TAX POLICY BRIEFING BOOK A Citizens' Guide for the 2008 Election and Beyond THE NUMBERS What are the federal government s sources of revenue?... I-1-1 How does the federal
More informationPublic Pensions. Taiwan. Expanding coverage and modernising pensions. Pension System Design. 1Public Pensions. Social security.
Taiwan Expanding coverage and modernising pensions Pension System Design Taiwan s pension system is in a process of transition and reform. In the realm of public pensions, there is a basic safety net for
More informationNBER WORKING PAPER SERIES THE GROWTH IN SOCIAL SECURITY BENEFITS AMONG THE RETIREMENT AGE POPULATION FROM INCREASES IN THE CAP ON COVERED EARNINGS
NBER WORKING PAPER SERIES THE GROWTH IN SOCIAL SECURITY BENEFITS AMONG THE RETIREMENT AGE POPULATION FROM INCREASES IN THE CAP ON COVERED EARNINGS Alan L. Gustman Thomas Steinmeier Nahid Tabatabai Working
More informationTaxability of Prizes and Awards President s Engagement Prizes. December 9, Office of the Comptroller
Taxability of Prizes and Awards President s Engagement Prizes December 9, 2015 1 Disclaimer The University is not permitted to provide personal tax advice. This presentation is an overview of what to expect.
More informationThe Federal Tax Enactments of 1969
College of William & Mary Law School William & Mary Law School Scholarship Repository William & Mary Annual Tax Conference Conferences, Events, and Lectures 1969 The Federal Tax Enactments of 1969 James
More informationCHAPTER 29 GOVERNMENT SPENDING
CHAPTER 29 GOVERNMENT SPENDING Chapter in a Nutshell The level and composition of government spending will always be topics for debate. Decisions about government spending are value judgments, as well
More informationOpinions of Small Employers. NFIB Research Foundation Washington, DC
Opinions of Small Employers NFIB Research Foundation Washington, DC 1 Susquehanna Polling and Research Sample Size: 500 small-business owners with 1-250 employees, random sample from the Dun and Bradstreet
More informationTaxation-Overview (Chapter 18)
(Chapter 18) So far, we have talked about different government expenditure items: Education Social Security Health insurance Welfare programs How does local and federal governments finance such programs?
More informationChapter 9 Test. Name: Class: Date: True/False Indicate whether the statement is true or false.
Name: Class: Date: ID: A Chapter 9 Test True/False Indicate whether the statement is true or false. 1. Supply and demand are used to predict the incidence of a tax. 2. The two principles of taxation are
More informationINTRODUCTION THE GOVERNMENT S SOURCES OF REVENUE
C HAPTER OVERVIEW INTRODUCTION The central political issue for many years has been how to pay for policies that most people support. A budget is a policy document allocating burdens (taxes) and benefits
More informationOctober 13, Premium Credits to Help Families Afford Coverage
820 First Street NE, Suite 510 Washington, DC 20002 Tel: 202-408-1080 Fax: 202-408-1056 center@cbpp.org www.cbpp.org October 13, 2009 FINANCE COMMITTEE HEALTH REFORM BILL MAKES IMPROVEMENTS, BUT STILL
More information