Bundle: Principles of Economics, Loose-leaf Version, 8th + LMS Integrated MindTap Economics, 2 terms (12 months) Printed Access Card
Question
Book Icon
Chapter 12, Problem 1CQQ
To determine

The two largest sources of total revenue for the U.S. federal government.

Expert Solution & Answer
Check Mark

Answer to Problem 1CQQ

Option ‘b’ is correct.

Explanation of Solution

Option (b):

Personal income tax and payroll taxes for social insurance are the two important sources of tax revenue for the U.S. federal government. Thus, option b is correct.

Option (a):

The U.S. federal government also levies corporate tax but its contribution is much smaller than that of personal income tax and payroll tax. Thus, option ‘a’ is incorrect.

Option (c):

The U.S. federal government also levies corporate tax but its contribution is much smaller than personal income tax and payroll tax. Thus, option ‘c’ is incorrect.

Option (d):

Payroll tax has the significant contribution in the U.S federal government tax revenue, while property tax is one of the important sources of tax revenue for the state and local governments and not for the U.S federal government. Hence, option ‘d’ is incorrect.

Economics Concept Introduction

Concept introduction:

Personal income tax: A tax which is levied on the incomes generated from the different sources is known as the personal income tax.

Payroll tax: This is the tax which is levied on the wages that the firms pay to their workers.

Sales tax: Sales tax is calculated as the percentage of the total amount spent on the final goods and services.

Property tax: A tax which is levied on the property owners as a percentage of the estimated value of the property is known as property tax.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Difference-in-Difference In the beginning of 2001, North Dakota legalized fireworks. Suppose you are interested in studying the effect of the legalizing of fireworks on the number of house fires in North Dakota. Unlike North Dakota, South Dakota did not legalize fireworks and continued to ban them. You decide to use a Difference-in-difference (DID) Model. The numbers of house fires in each state at the end of 2000 and 2001 are as follows: Number of house fires in Number of house fires in Year North Dakota 2000 2001 35 50 South Dakota 54 64 a. What is the change in the outcome for the treatment group between 2000 and 2001? Show your working for full credit. (10 points) b. Can we interpret the change in the outcome for the treatment group between 2000 and 2001 as the causal effect of legalizing fireworks on number of house fires? Explain your answer. (10 points)
C. Regression Discontinuity Birth weight is used as a common sign for a newborn's health. In the United States, if a baby has a birthweight below 1500 grams, the newborn is classified as having “very low birth weight". Suppose you want to study the effect of having very low birth weight on the number of hospital visits made before the baby's first birthday. You decide to use Regression Discontinuity to answer this question. The graph below shows the RD model: Number of hospital visits made before baby's first birthday 5 1400 1450 1500 1550 1600 Birthweight (in grams) a. What is the running variable? (5 points) b. What is the cutoff? (5 points) T What is the discontinuity in the graph and how do you interpret it? (10 points)
C. Regression Discontinuity Birth weight is used as a common sign for a newborn's health. In the United States, if a baby has a birthweight below 1500 grams, the newborn is classified as having “very low birth weight". Suppose you want to study the effect of having very low birth weight on the number of hospital visits made before the baby's first birthday. You decide to use Regression Discontinuity to answer this question. The graph below shows the RD model: Number of hospital visits made before baby's first birthday 5 1400 1450 1500 1550 1600 Birthweight (in grams) a. What is the running variable? (5 points) b. What is the cutoff? (5 points) T What is the discontinuity in the graph and how do you interpret it? (10 points)
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Principles of Economics, 7th Edition (MindTap Cou...
Economics
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
ECON MACRO
Economics
ISBN:9781337000529
Author:William A. McEachern
Publisher:Cengage Learning
Text book image
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
Text book image
Principles of Microeconomics
Economics
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:Cengage Learning