Macroeconomics: Private and Public Choice
15th Edition
ISBN: 9781285453545
Author: Russell Sobel; Richard Stroup; James Gwartney; David Macpherson
Publisher: South-Western College Pub
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Chapter ST1, Problem 5CQ
To determine
The effects of increase in the no of people paying no taxes on the efficiency of the political process.
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Chapter ST1 Solutions
Macroeconomics: Private and Public Choice
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- For 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_forwardWhat is that the people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much and attack them for being wealthy? Why do poor people not have to pay taxes?arrow_forwardWhat would happen if Texas collects less taxes and generates less revenue?arrow_forward
- Let's walk through the median voter theorem in a little more detail. Consider a town with three voters, Enrique, Nandini, and Torsten. The big issue in the upcoming election is how high the sales tax rate should be. As you'll learn in macroeconomics (and in real life), on average, a government that wants to do more spending has to bring in more taxes, so "higher permanent taxes" is the same as "higher government spending." Enrique wants low taxes and small government, Nandini is in the middle, and Torsten wants the biggest town government of the three. Each one is a stubborn person, and his or her favorite position-what economic theorists call the "ideal point-never changes in this problem. Their preferences can be summed up like this, with the x denoting each person's favorite tax rate: Enrique 0% N O Sales tax rate Nandini P Torsten 20% Suppose there are two politicians running for office, N and O (so ignore P for now). Enrique will vote for Choose your answer. Nandini will vote for…arrow_forwardIdentify proportional, progressive, and regressive taxes.arrow_forwardSuppose you earn $40,000 per year and pay taxes based on marginal tax rates. The first tax bracket, which taxes at 5 percent, ranges from $0 to $20,000. The second tax bracket, which taxes at 25 percent, ranges from $20,001 to $80,000. How much will you pay in total taxes? Instructions: Enter your answer as a whole number. 2$arrow_forward
- Is the tax imposed on cigarettes a progressive, proportional, or a regressive form of taxation? Why? What are some other examples of this type of tax?arrow_forwardIn today’s societies, we pay several different types of taxes. Take a moment to consider all the different kinds of taxes you paid last week. You might have paid sales tax on items you bought or had income come out of your paycheck. To complete the Discussion activity, write a post that answers the following questions: Name three types of taxes and analyze the deadweight loss of each.arrow_forwardPlease answer completely. Thank you very much.arrow_forward
- Those on the political left would tend to favor _____ government action and _____ taxation to reduce income inequality. more; lower less; higher more; higher less; lowerarrow_forwardAll of the following statements are true about median voter theory, except: Select the correct answer below: The median voter is in the middle of the political spectrum. The effects of the U.S. sugar lobby supports median voter theory. Median voter theory suggests that if a candidate needs more than 50% to win an election, the best way to win is to have median preferences. The median voter theory argues that politicians will try to match policies to what pleases the median voter preferences.arrow_forwardSuppose you earned $60,000 per year and pay taxes based on marginal tax rates. The first tax bracket which taxes at 10% ranges from zero dollars to $30,000. The second tax bracket which tax at 25% ranges from 30,001 to $120,000. How much will you pay in total taxes?arrow_forward
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