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The U.S. income tax is currently O progressive O proportional O regressive O proactive a tax.
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- Indicate whether each the following statements about taxes is true or false. a. The incidence of a tax is determined by which group (buyers or sellers) must write the check to the government. O True O FalseThe Federal Budget- Ask FRED The accompanying graph contains data on "U.S Individual Income Tax: Tax Rates for Regular Tax: Highest Bracket'" reproduced in the accompanying graph to analyze this aspect of the U.S. tax system_ over the past 100 vears. FREDU.S Individual Income Tax: Tax Rates for Regular Tax: Highest Bracket 100 90 80 70 60 50 a 40 30 20 10 0 1920 1940 1960 1980 2000 Source: U.S. Department of the Treasury. Internal Revenue Service a. When the income tax was first introduced, what was the rate on the highest bracket?Suppose that the U.S. government decides to charge cola producers a tax. Before the tax, 15 million cases of cola were sold every month at a price of $7 per case. After the tax, 9 million cases of cola are sold every month; consumers pay $10 per case, and producers receive $4 per case (after paying the tax). A. The amount of the tax on a case of cola is ___ per case B. Of this amount, the burden that falls on consumers is ___ per case C. and the burden that falls on producers is ___ per case True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on consumers.
- Figure 4-5. The graph shows the impact of an excise tax. Price $2.00 1.50 1.00 .50 B A M E H K I 350 F 500 Quantity tax G Stax $1.00 for consumers and $0.50 for producers $1.00 for consumers and $1.00 for producers. $0.25 for consumers and $0.75 for producers. $0.50 for consumers and $0.50 for producers. S DSR Refer to Figure 4-5. The amount of the actual tax burden paid by consumers and producers is11.00 Ob. 1/5 Oc 1/3 O d. 3/4 10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 300 600 900 1200 1500 2100 1800 Supply Demand 2400 Suppose that a $3 tax was imposed on the market above, what is the consumer tax-incidence? a. 2/3If the government wants to increase the tax revenue they collect from sellers, then it should O Tax goods that have low elasticity of demand and high elasticity of supply. O Tax goods that have high elasticity of demand and supply. Tax goods that have high elasticity of demand and low elasticity of supply. O Tax goods that have low elasticity of demand and supply.
- 5. Calculating tax incidence Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 40 billion cases of cola were sold every year at a price of $7 per case. After the tax, 34 billion cases of cola are sold every year; consumers pay $8 per case (induding the tax), and producers receive $4 per case. per case, and the The amount of the tax on a case of cola isS per case. Of this amount, the burden that falls on consumers is S burden that falls on producers is s per case. True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on producers. O True O FalseSuppose that the government decides to charge cola consumers an excise tax. Before the tax, 12 million cases of cola are sold every month at a price of $3.50 per case. After the tax, 6million cases of cola are sold every month; consumers pay $4.00 per case and producers receive $2.00 per case. a. What is the excise tax on cola?b. On whom does the incidence of the tax fall more heavily?c. How much government revenue will be generated by the excise tax?5. Calculating tax incidence Suppose that the U.S. government decides to charge beer producers a tax. Before the tax, 10,000 cases of beer were sold every week at a price of $4 per case. After the tax, 5,000 cases of beer are sold every week; consumers pay $6 per case, and producers receive $3 per case (after paying the tax), The amount of the tax on a case of beer is S burden that falls on producers is True per case. True or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied on consumers. O False per case. Of this amount, the burden that falls on consumers is 5 per case, and the
- If the government imposes a $5 excise tax on the production of wine, then from the perspective of wine consumers, the "effective" or after-tax supply curve for wine wil shift down vertically by more than $5 Mp verticaly by exactly SS down vertically by exoctly $5 dwn vertically hv less than $ atly Inv less then 15 left herleatySuppose that your state raises its sales tax from5 percent to 6 percent The state revenue commissionerlo~asts a 20 percent increase in sales tax revenue.Is this plausible? Explain.learn-us-east-1-prod-fleet01-xythos.content.blackboardcdn.com Bb https://.. a SD Bb Bb Bb 1. From the time of George Washington's presidency to the present, the percentage of the average American's income that goes to pay taxes A. has decreased from about 20 percent to about 10 percent. has decreased from about 50 percent to about 25 percent. C. has remained constant at about 10 percent. D. has risen from less than 2 percent to above 45 percent. Е. В. has risen from less than 5 percent to above 25 percent. 2. According to the textbook, which of the following statements is (are) correct for the United States? (x) The individual income tax and the payroll tax are the two largest sources of revenue for the U.S. federal government. (y) Corporate income taxes and excise taxes make up more than 30 percent of the tax revenue for the U.S. federal government. (z) In general, the two most important taxes for state and local governments in the U.S are sales taxes and property taxes. А. (x), (y)…
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