Why are there taxes? Main reason: to raise revenue for the government
|
|
- Hilda Helen Richard
- 6 years ago
- Views:
Transcription
1 Taxes and Taxation
2 Why are there taxes? Main reason: to raise revenue for the government
3 What are some other reasons for taxation? To encourage some kinds of economic activity (e.g., home ownership -- see the mortgage interest deduction) To discourage consumption of some items (alcohol, tobacco) To reprice items in the economy. When the government pays farmers a subsidy for a crop, for instance, the government is using taxpayers money to price items differently than would be the case in a free market economy. To redistribute income and/or wealth
4 If taxes are a necessary evil, what principles should guide the design of a good tax system?
5 Adam Smith and his four principles of taxation 1. Equity (i.e., fairness) 2. Certainty or predictability 3. Convenience (for the contributor to pay the tax) 4. Efficiency
6 Equity Equity in taxation concerns fairness, the idea that the tax system should be fair Something to consider: Do taxes impose the same burdens on those in different economic circumstances? Who should pay taxes? Two different, competing criteria. 1. The ability-to-pay principle. People with higher incomes should pay more tax. 2. The benefits-received principle. Those who benefit from a particular government program should pay for it.
7 Deadweight loss of taxation (caused by an inefficient tax) A deadweight loss occurs when the cost to consumers and producers from a tax due to lost productivity or sales is larger than the size of the tax revenue it generates. (Econ Alive, p. 235) A deadweight loss usually means that someone is worse off (in terms of cost) while no one is better off (in terms of benefit). In the diagram to the right, D and E represent deadweight loss.
8 Different types of taxation Proportional taxes Progressive taxes Regressive taxes
9 Proportional (or flat) tax A proportional tax is a tax that takes the same share of income at all income levels. If for example we had a proportional income tax for individuals in the United States right now, say 20%, Bill Gates and a worker at a fast-food restaurant would pay tax at the same rate. An advantage: Proportional taxes (aka flat taxes) are simpler to figure out and administer than other kinds of taxes A disadvantage: It doesn t seem fair that a billionaire and a poor person should pay tax at the same rate. Look at the graph on the right: which line (A, B, C or D) represents a proportional tax?
10 A progressive tax is a tax that takes a larger share of income as income increases. It is based on the ability-to-pay principle. Supporters of progressive taxes say that it is fairer. Opponents say that it really isn t fair. In fact, it penalizes those who work hard to gain more income. Progressive tax
11 Regressive tax A regressive tax is a tax that takes a smaller share of income as income increases. A proportional tax can also be regressive if it takes a bigger bite out of the incomes of poor people than rich people. A sales tax is usually regressive. A VAT (or value-added tax) is often regressive also.
12 Different kinds of taxes
13 Income tax (personal and corporate) Personal income tax is a tax assessed on someone s annual income. It can be levied by federal, state and local governments. At the federal level it is a progressive tax. Corporate income tax, on the other hand, is applied to the profits of corporations. Like the individual income tax, it is progressive at the federal level. Critics of this tax on business allege that it is simply passed on to consumers. It diminishes business activity. Some critics claim that the corporate income tax in the U.S. is too high compared to other countries and should be reduced.
14 The inheritance (or estate) tax An inheritance or estate tax is a tax that is levied on some or all of the estate (property and possessions) that a person leaves behind at death. The heirs must pay the tax. These taxes are essentially the same; the main difference is that they are called estate taxes at the federal level and estate or inheritance taxes at the state level. Estate taxes are progressive; the more you inherit, the higher the rate of tax.
15 Luxury tax and Excise tax Luxury taxes are levied on the sale of luxury items (yachts and private jets, e.g.). They are progressive taxes. Excise taxes are usually levied on goods the government wants to regulate (e.g., alcohol and tobacco). These taxes are sometimes called sin taxes. They are generally regressive taxes.
16 Property tax Property taxes are commonly levied on real estate (buildings, land, etc.). Some states levy them on cars, motorcycles and boats also. They are a major source of funding for schools.
17 Sales tax A sales tax is paid for by the customer when he or she purchases various goods or services. It is generally regressive. It is levied by states and some cities.
18 User fees and tolls User fees and tolls are charged for the use of public facilities and services. User fees are also required for permits and licenses.
19 Different parts of the federal budget The federal budget is composed of two main parts: mandatory spending and discretionary spending. What does mandatory spending mean? What does discretionary spending mean?
20 These expenditures are made over a fiscal year The fiscal year is a 12- month accounting period that is used by businesses and other organizations. The federal government begins its fiscal year every year on October 1.
21 Fixed or mandatory spending (entitlements, etc.) Mandatory spending are government expenditures that are fixed by law and can only be changed by new laws. It is different from discretionary spending. Examples of mandatory spending include Social Security, Medicare, interest on the national debt, and food stamps.
22 Discretionary spending Discretionary spending are expenditures that can be raised or lowered as a legislature sees fit. Examples of discretionary spending include military (or defense) expenditures and education.
23 Problems with the Federal Budget What are some of the main problems with the federal budget? 1. Expenses exceed revenues. 2. Long-term debt is getting worse. 3. Too much is spent on some things and not enough on others. (Opinions will vary.)
24 What are some possible solutions to the longterm budget deficit? Cut expenses Increase revenue (via tax increases, etc.)
25 State and local taxes and expenditures State and local budgets reflect different priorities and obligations compared to the federal budget. For one thing, they devote a significant portion of their budget to education.
Taxes 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 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 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 informationOCR Economics AS-level
OCR Economics AS-level Macroeconomics Topic 3: Application of Policy Instruments 3.1 Fiscal policy Notes The government budget: The government budget is comprised of tax revenues and government expenditure.
More informationCHAPTER 9 Sources of Government Revenue
CHAPTER 9 Sources of Government Revenue Section 1, Chapter 9 1 2 ECONOMIC IMPACT OF TAXES Taxes affect the four factors of production land, labor, capital, and entrepreneurship. A tax placed on a good
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 informationAQA Economics A-level
AQA Economics A-level Macroeconomics Topic 5: Fiscal and Supply Side Policies 5.1 Fiscal policy Notes Fiscal policy involves the manipulation of government spending, taxation and the budget balance. It
More informationOCR Economics A-level
OCR Economics A-level Macroeconomics Topic 3: Application of Policy Instruments 3.1 Fiscal policy Notes The government budget: The government budget is comprised of tax revenues and government expenditure.
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 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 informationChapter 25: Local Government and Finance Section 4
Chapter 25: Local Government and Finance Section 4 Objectives 1. Describe the major Federal and State limits on raising revenue. 2. List the four principles of sound taxation. 3. Identify major tax and
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 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 informationTax Design. Professor David Bell University of Stirling
Tax Design Professor David Bell University of Stirling Fundamentals of tax design Relying heavily on the Mirrlees Review (Institute for Fiscal Studies) Key concerns are the effect of tax system on: Distribution
More informationTopic# 3: General Theory of Taxation. Romanian tax system General theory of taxation PROF. ANDREEA STOIAN, PHD LECTURE 5
Topic# 3: General Theory of Taxation. Romanian tax system General theory of taxation PROF. ANDREEA STOIAN, PHD LECTURE 5 Content General theory of taxation Taxes Principles of taxation Tax base and tax
More informationUnit #3: The Government and the Economy
Copyright by The McGraw-Hill Companies, Inc. Chapter 9: Sources of Government Revenue Section #1: The Economics of Taxation I. Economic Impact of Taxes A. Resource Allocation What can happen to the factors
More informationThe Government and Fiscal Policy
The Government and Fiscal Policy How does the government affect us? Government provide water, electricity, sewerage, education, health services, police and defence force. Some of these are paid for directly
More informationSoojae Moon Fall 2009 <Oct. 6>
Chapter 8: Application: The Costs of Taxation How does a tax affect consumer surplus, producer surplus, and total surplus? What is the deadweight loss of a tax? What factors determine the size
More informationMost non-farm jobs in Texas are in the general area of a. manufacturing.
Government decisions regarding revenues, expenditures, and borrowing are referred to as a. monetary policy. b. foreign policy. c. banking policy. *d. fiscal policy. Texas has generally resisted using all
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 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 informationSources of Government Revenue. Taxes The Good the Bad and the Ugly
Sources of Government Revenue Taxes The Good the Bad and the Ugly 1. Resource Allocation Factors of Production are affected when a tax is levied. Taxes raise cost of production and shifts the supply curve
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 informationDRAFT RESPONSE DOCUMENT 2018 DRAFT RATES AND MONETARY AMOUNTS AND AMENDMENT OF REVENUE LAWS BILL (RATES BILL) Non-VAT issues
DRAFT RESPONSE DOCUMENT 2018 DRAFT RATES AND MONETARY AMOUNTS AND AMENDMENT OF REVENUE LAWS BILL (RATES BILL) Non-VAT issues Standing Committee on Finance Presenters: National Treasury 13 September 2018
More informationIssue Paper: Linking revenue to expenditure
Issue Paper: Linking revenue to expenditure Introduction Mobilising domestic resources through taxation is crucial in helping developing countries to finance their development, relieve poverty, reduce
More informationThe Constitution gives Congress the power to tax.
WHAT ARE TAXES? WHAT GIVES THE MAN THE POWER TO COLLECT TAXES? The Constitution gives Congress the power to tax. WHAT ARE THE FOUR WAYS IN WHICH THE MAN S POWER TO TAX IS LIMITED? 1) Taxes cannot be used
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 information1 of 32. Market Efficiency and Government Intervention. Economics: Principles, Applications, and Tools O Sullivan, Sheffrin, Perez 6/e.
1 of 32 2 of 32 In the late 1600s, England shifted its residential tax base from hearths to windows. P R E P A R E D B Y FERNANDO QUIJANO, YVONN QUIJANO, AND XIAO XUAN XU 3 of 32 1 A P P L Y I N G T H
More informationMicroeconomics. The Design of the Tax System. Introduction. In this chapter, look for the answers to these questions: N.
C H A P T E R 12 The Design of the Tax System P R I N C I P L E S O F Microeconomics N. Gregory Mankiw Premium PowerPoint Slides by Ron Cronovich 2010 South-Western, a part of Cengage Learning, all rights
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 informationTexas Budget Policy Part I Texas is where the modern conservative theory of budgeting - the belief that you should never raise taxes under any
Texas Budget Policy Part I Texas is where the modern conservative theory of budgeting - the belief that you should never raise taxes under any circumstances, that you can always balance the budget by cutting
More informationEC441 Study Guide I Fall 2018 R. Congleton Public Economics WVU
EC441 Study Guide I Fall 2018 R. Congleton Public Economics WVU 1. Matching: connect the definitions and facts by writing the appropriate letter in the blank to the left of the terms in the first column:
More informationSources of Government Revenue. Taxes The Good the Bad and the Ugly
Sources of Government Revenue Taxes The Good the Bad and the Ugly 1. Resource Allocation Factors of Production are affected when a tax is levied. Taxes raise cost of production and shifts the supply curve
More informationCIE Economics AS-level
CIE Economics AS-level Topic 3: Government Microeconomic Intervention b) Taxes (direct and indirect) Notes Direct Taxes Direct taxes are paid directly to the government from the tax payer. Examples include
More informationHOW MUCH SHOULD THE FOLLOWING INDIVIDUALS PAY IN TAXES?
TAXES TAXES Taxes are required contributions, levied by the government on personal income and business profits or added to the cost of some goods, services, and transactions. Raise revenue to finance government
More informationIndian Taxation System for Banking & SSC - GK Notes in PDF
Indian Taxation System for Banking & SSC - GK Notes in PDF Appearing for Government Exams? If yes then you must be aware that the General Knowledge Section is an integral part of all the govt. exams. If
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 informationDIVISION - I. 2. Basic Concepts of Excise Duty Basic Concepts of Customs Duty Basic Concepts of VAT Basic Concepts of CST 146
Contents DIVISION - I 1. Basic Concepts of Indirect Taxes 1 2. Basic Concepts of Excise Duty 11 3. Basic Concepts of Customs Duty 63 4. Basic Concepts of VAT 101 5. Basic Concepts of CST 146 DIVISION -
More informationMoney Matters STEP BY STEP. the lesson by asking the following question: What are needs and how are they different from wants?
Teacher s Guide Time Needed: One class period Materials Needed: Student worksheets Copy Instructions: Reading, Guided Notes and Extension pages (class set; single-sided) Processing Activity Pate (class
More information14.41 Final Exam Jonathan Gruber. True/False/Uncertain (95% of credit based on explanation; 5 minutes each)
14.41 Final Exam Jonathan Gruber True/False/Uncertain (95% of credit based on explanation; 5 minutes each) 1) The definition of property rights will eliminate the problem of externalities. Uncertain. Also
More informationUnderstanding the Federal Budget 1
Understanding the Federal Budget 1 "For in the end, a budget is more than simply numbers on a page. It is a measure of how well we are living up to our obligations to ourselves and one another." --From
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 informationChoose the single best answer for each question. Do all of your scratch-work in the side and bottom margins of pages.
Econ 101, Sections 3 and 4, S11, Schroeter Exam #3, Special code = 0001 Choose the single best answer for each question. Do all of your scratch-work in the side and bottom margins of pages. 1. A tariff
More informationTax and fairness. Background Paper for Session 2 of the Tax Working Group
Tax and fairness Background Paper for Session 2 of the Tax Working Group This paper contains advice that has been prepared by the Tax Working Group Secretariat for consideration by the Tax Working Group.
More informationHow Progressive is the U.S. (Federal) Tax System?
How Progressive is the U.S. (Federal) Tax System? Data is for 1999 or 2002 depending on the series A 1 st Look: Increasing Marginal Rates Progressivity 2002: Federal Income Tax Rates before credits, etc.
More informationChapter Introduction. of Taxation. and Local Revenue Systems. and Reforms. Visual Summary
Chapter Introduction Section 1: Section 2: Section 3: Visual Summary The Economics of Taxation Federal, State, and Local Revenue Systems Current Tax Issues and Reforms Economic Impact of Taxes (cont.)
More informationUNIT 3B KEYNESIAN ECONOMICS AND FISCAL POLICY THE ROLE OF GOVERNMENT IN THE ECONOMY
UNIT 3B KEYNESIAN ECONOMICS AND FISCAL POLICY THE ROLE OF GOVERNMENT IN THE ECONOMY The slides with the s include information not covered on the AP Exam and thus will not be on the unit test. AD = C +
More informationUnit 3: Aggregate Demand and Supply and Fiscal Policy
Unit 3: Aggregate Demand and Supply and Fiscal Policy 1 Aggregate Demand 2 What is Aggregate Demand? Aggregate means added all together. When we use aggregates we combine all prices and all quantities.
More informationChapter 14 Section 1: What are taxes?
Chapter 14 Section 1: What are taxes? Tell us therefore, What thinkest thou? Is it lawful to give tribute unto Caesar, or not? But Jesus perceived their wickedness, and said, Why tempt ye me, ye hypocrites?
More informationApplication of Welfare Analysis: The Costs of Taxation
Application of Welfare Analysis: The Costs of Taxation A tax causes the after-tax price paid by consumers to go up, and the after-tax price received by sellers to go down. The tax causes consumer surplus
More informationGLOBAL. Microeconomics ELEVENTH EDITION. Michael Parkin EDITION
GLOBAL EITION Microeconomics ELEVENTH EITION Michael Parkin A Housing Market with a rent Ceiling 129 enforcement, the black market rent is close to the unregulated rent. But with strict enforcement, the
More informationTURKISH TAXATION SYSTEM
TURKISH TAXATION SYSTEM CORPORATE TAX: Taxable Income: The corporate tax is levied on the income and earning derived by corporations and corporate bodies. The income elements by Corporate Tax Law are the
More informationChapter 14 Section 2: Federal Taxes
Chapter 14 Section 2: Federal Taxes Objectives: o Objectives: Describe the process of paying individual income taxes o Identify: the basic characteristics of corporate income taxes. o Explain: the purpose
More informationUnit 4, Activity 1, Domestic Policy Vocabulary
Unit 4, Activity 1, Domestic Policy Vocabulary Word + - Example Definition domestic policy revenue expenditures taxation benefits received principle ability to pay principle progressive tax proportional
More informationPractice Questions and Answers from Lesson I-8: Taxes. Practice Questions and Answers from Lesson I-8: Taxes
Practice Questions and Answers from Lesson I-8: Taxes The following questions practice these skills: Compute the effects of an excise tax on price, quantity, and tax revenue. Show how the tax burden is
More informationApplication: The Costs of Taxation
8 Application: The Costs of Taxation PowerPoint Slides prepared by: Andreea CHIRITESCU Eastern Illinois University 1 Deadweight Loss of Taxation Tax on a good levied on buyers Demand curve shifts leftward
More informationThe Better Way Tax Plan
BRIEF ANALYSIS NO. 120 AUGUST 8, 2017 The Better Way Tax Plan The Better Way tax reform plan would bring jobs home, raise productivity and wages, and make the personal income tax fairer. Laurence J. Kotlikoff
More informationDef: Tax is a levy charged by the government on individuals and companies to finance government expenditure.
Chap 12 Taxation Def: Tax is a levy charged by the government on individuals and companies to finance government expenditure. The main taxes paid by households The PAYE system. Employers deduct the tax
More informationHOW TO INCLUDE CHARITABLE GIFTING
HOW TO INCLUDE CHARITABLE GIFTING in Your Estate Plan PHILANTHROPY IS A WAY OF LIFE FOR MANY For many people philanthropy is not just something they turn to for a tax write-off when tax season comes around
More informationUnit 3: Aggregate Demand and Supply and Fiscal Policy
Unit 3: Aggregate Demand and Supply and Fiscal Policy 1 Demand and Supply Review 1. Define Demand and the Law of Demand. 2. Identify the three concepts that explain why demand is downward sloping. 3. Identify
More informationBest practices. Chapter V
103 Chapter V Best practices This chapter describes best practices for tobacco tax policy, emphasizing the public health impact of tobacco taxes while also recognizing the importance of the revenues generated
More information7.1 Types of Economies
7.1 Types of Economies I. Types of Economic Systems: All economies must answer 3 key economic questions: 1. 2. 3. what to produce, how to produce, for whom to produce Traditional Economies custom, culture,
More informationUnit 2: Supply, Demand, and Consumer Choice
Unit 2: Supply, Demand, and Consumer Choice 1 Unit 2: Supply, Demand, and Consumer Choice Length: 3 Weeks Chapters: 3, 20, and 21 Activity: Pearl Exchange Assignment: PS #2 2 DEMAND DEFINED What is Demand?
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 informationHow Progressive is the U.S. (Federal) Tax System?
How Progressive is the U.S. (Federal) Tax System? Data is for 1999 or 2002 depending on the series First, some Definitions Regressive Tax System: Proportional Tax System: Progressive Tax System: A 1 st
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 informationChapter 02 Policy Standards for a Good Tax
Chapter 02 Policy Standards for a Good Tax True / False Questions 1. A tax meets the standard of sufficiency if it is easy for people to pay the tax. 2. The federal government is not required to pay interest
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 informationRevenue & Expenditures
Revenue & Expenditures Ch. 8 in text 1 Revenue: Five basic sources Taxes & Other Compulsory Revenue Taxes, licenses, mandatory fees Gifts & Donations Solicited through fund-raising or unsolicited Earned
More information2. The taxation structure as described by the Implicit Tax Rate (ITR) as % of taxable income on labor, capital and consumption;
TAXATION IN BULGARIA Petar Ganev, IME In this set of papers we compare the fiscal systems of several European countries. This chapter is dedicated to the Bulgarian fiscal system. We are mostly interested
More informationReference Guide TESTAMENTARY TRUSTS
Reference Guide TESTAMENTARY TRUSTS While most people have heard about trusts, many do not really know what they are or what benefits they offer and often incorrectly believe that trusts are only for wealthy
More informationBudgets and Taxes Toolkit: Frequently Asked Questions
Budgets and Taxes Toolkit: Frequently Asked Questions This document is not intended to provide the right answers to questions you might be asked, but rather as illustrations of how to work with values
More informationFrom Lindsey W. Duvall. Duvall Law Firm, LLC. 147 Old Solomons Island Road Suite 306 Annapolis MD
Uncovering Charitable Planning Opportunities Volume 7, Issue 11 Charitable giving is discretionary spending. It is affected by both the economy and the income tax rates. Not surprisingly, charitable giving
More informationChapter 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 informationTHEORETICAL TOOLS OF PUBLIC FINANCE
Solutions and Activities for CHAPTER 2 THEORETICAL TOOLS OF PUBLIC FINANCE Questions and Problems 1. The price of a bus trip is $1 and the price of a gallon of gas (at the time of this writing!) is $3.
More informationTaxation principles of GST and experience of present law as relevant to GST
Taxation principles of GST and experience of present law as relevant to GST Outline of discussion General Taxation principles Indian indirect Tax system Road to GST Introduction of GST Benefits of GST
More informationPublic Finance and Public Policy: Responsibilities and Limitations of Government. Presentation notes, chapter 9. Arye L. Hillman
Public Finance and Public Policy: Responsibilities and Limitations of Government Arye L. Hillman Cambridge University Press, 2009 Second edition Presentation notes, chapter 9 CHOICE OF TAXATION Topics
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 informationFiscal Policy - the basics:
Fiscal Policy - the basics: 1) Introduction Fiscal policy is the use of government expenditure (G) and taxation (T) to control the economy. It can be operated in two basic ways, demand side and supply
More informationWealth Inequality in the United States (panelist)
University of Oklahoma College of Law From the SelectedWorks of Jonathan B. Forman January 3, 2007 Wealth Inequality in the United States (panelist) JONATHAN B FORMAN, University of Oklahoma Available
More informationTaxing Consumption TAX POLICY. The World Bank J U N E
Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized The World Bank Taxing Consumption Richard M. Bird* Domestic consumption in most countries
More informationEdexcel Economics AS-level
Edexcel Economics AS-level Unit 1: Markets in Action Topic 4: Price Determination 4.4 Indirect taxes and subsidies Notes Indirect Taxes Indirect taxes are imposed by the government and they increase production
More informationOptimal Taxation : (c) Optimal Income Taxation
Optimal Taxation : (c) Optimal Income Taxation Optimal income taxation is quite a different problem than optimal commodity taxation. In optimal commodity taxation the issue was which commodities to tax,
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 information2. Suppose a family s annual disposable income is $8000 of which it saves $2000. (a) What is their APC?
REVIEW Chapters 10 and 13 Fiscal Policy 1. Complete the following table assuming that (a) MPS = 1/5, (b) there is no government and (c) all saving is personal saving. Level of output and income Consumption
More informationTaxes Primer September 27, 2013
Taxes Primer September 27, 2013 WHERE DOES THE MONEY COME FROM? Each year, some of the revenue the federal government collects comes from various taxes. In 2012, taxpayers paid almost $2.5 trillion, which
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 informationSTATE AND LOCAL TAXES AND SPENDING
STATE AND LOCAL TAXES AND SPENDING Like the federal government, state and local governments use the revenue from taxes to pay for a variety of programs and services. In general, states spend the largest
More informationNATIONAL QUALIFICATIONS. Intermediate 2 Economics Specimen Question Paper [C038/SQP066] Time: 1 hour 45 minutes
[C08/SQP0] Intermediate Economics Specimen Question Paper Time: hour minutes NATIONAL QUALIFICATIONS 0 marks are allocated to this paper. Part (0 marks) Candidates should attempt both items. Part (0 marks)
More informationBUDGET & TAX PRIMER THE TEXAS. Where the State s Money Comes From & How It is Spent. Center for Public Policy Priorities
Center for Public Policy Priorities The CPPP is a non-partisan, non-profit policy research organization seeking sound solutions to the challenges faced by low- and moderate-income Texans. The Center is
More informationChapter 10 The Government in the Economy: Taxation and Regulation
Chapter 10 The Government in the Economy: Taxation and Chapter Outline 10. 10. 10. 10. 10. 1. Taxation and Government Spending in the United States 2. 3. Government Failures 4. Equity versus Efficiency
More informationWisconsin Budget Toolkit
Wisconsin Budget Toolkit INTRODUCTION Updated January 2016 Countless times a day, you are affected by state budget decisions. When you turn on the water, send your child to school, turn on a light, or
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 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 informationCal Poly Pomona, EC Bruce Brown Midterm II, February 22, 2001 (please clearly print your family name with all capital letters)
Cal Poly Pomona, EC 201 - Bruce Brown NAME Midterm II, February 22, 2001 (please clearly print your family name with all capital letters) - Mark your answers on this exam (only this exam will be returned,
More informationDeficit Day to Bankruptcy Day
Deficit Day to Bankruptcy Day April 2014 copies of this presentation can be found at Jan 1 Dec 31 Deficit Day! How much government spending do people fund with their tax dollars? Top 1% 56 days 2% to 5%
More informationYour Guide to Life Insurance for Families
Your Guide to Life Insurance for Families (800) 827-9990 HealthMarkets.com Your Guide to Life Insurance for Families Contents Does My Family Need Life Insurance? 4 Types of Life Insurance for Families
More informationGrowing Public: Is the Welfare State Mortal or Exportable? Peter H. Lindert University of California - Davis
Growing Public: Is the Welfare State Mortal or Exportable? Peter H. Lindert University of California - Davis Six Conclusions: The welfare state is not an endangered species. No race to the bottom. The
More informationFundamentals Level Skills Module, Paper F6 (MWI)
Answers Fundamentals Level Skills Module, Paper F6 (MWI) Taxation (Malawi) June 203 Answers and Marking Scheme Marks (a) Calculation of capital gain or losses for the year ended 3 December 202 Office building
More informationPublic Debt Classification of Public Debt (a) Internal and External: (b) Productive and Unproductive: (c) Short-term and Long-term:
Public Debt Public debt refers to borrowing by a government from within the country or from abroad, from private individuals or association of individuals or from banking and NBFIs. Classification of Public
More information