Economics: Private and Public Choice
16th Edition
ISBN: 9781337642224
Author: James D. Gwartney; Richard L. Stroup; Russell S. Sobel
Publisher: Cengage Learning US
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Chapter ST1, Problem 3CQ
To determine
The progressive tax system.
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Economics: Private and Public Choice
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- Your Finance Minister considers making a tax reform. He asks you, as a senior tax administrator, to advise him on the requirements from a good tax system. What would you advise him?arrow_forwardHow does a "progressive tax system" differ from a "regressive tax system" in terms of income distribution? A) A progressive tax system imposes higher tax rates on higher incomes, while a regressive tax system imposes higher tax rates on lower incomes. B) A progressive tax system imposes a uniform tax rate on all incomes, while a regressive tax system adjusts rates based on economic cycles. C) A progressive tax system reduces income inequality by taxing higher incomes at higher rates, while a regressive tax system can increase inequality by placing a heavier burden on lower incomes. D) A progressive tax system exempts lower incomes from taxation, while a regressive tax system taxes all incomes at the same rate.arrow_forwardWhat would it take to convert a sales tax into a true consumption tax? Senator Smith has suggested that the U.S. federal income tax is a more efficient form of tax than the Texas sales tax. What are the arguments for and against this position?arrow_forward
- Do tax cuts increase economic growth and taxable income so much that tax revenue increases?arrow_forwardWealth taxes are controversial. Please be specific What is your opinion on wealth taxes? Why?arrow_forwardAnswer all the questions! 1. What has been the relationship over the past century between the U.S. economy’s income and the percentage of that income that the government collects in revenues? 2. What are the characteristic(s) of an efficient tax system?arrow_forward
- How should the government execute Fiscal Policy?arrow_forwardEconomist Arthur lagger famously pointed out that, in some cases, income tax revenue can actually go up when tax rates go down. Why might this be the case?arrow_forwardFor the government to run efficiently, it must collect tax revenue from the people. What is the greatest source of revenue for the federal government? sales taxes income taxes tariffs property taxesarrow_forward
- What is a progressive income tax? How does this impact the distribution of (after-tax) income in the United States?arrow_forwardWhich of the following is true of indirect business taxes? a) They are included in corporate profits. b) They are not included in the GDP. c) They reduce the value of total economic output thereby reducing the value of the GDP. d) They are collected by business firms that act as agents for the government. e) They are the same as personal income taxes.arrow_forwardDoes tax cuts reduce tax revenue?arrow_forward
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