Excise taxes Select one: O a. bring in approximately 50% of state and local tax revenue. O b. operate like the federal personal income tax except that they do not apply to low income people. O c. bring in approximately 20% of federal tax revenue. O d. operate like sales taxes but are applied only to specific goods and services.

Excise taxes Select one: O a. bring in approximately 50% of state and local tax revenue. O b. operate like the federal personal income tax except that they do not apply to low income people. O c. bring in approximately 20% of federal tax revenue. O d. operate like sales taxes but are applied only to specific goods and services.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Design Of The Tax System

Section: Chapter Questions

Problem 4PA

See similar textbooks

Similar questions

Suppose you are a typical person in the U.S. economy. You pay 4 percent of yourincome in a state income tax and 15.3 percent of your labor earnings in federal payrolltaxes (employer and employee shares combined). You also pay federal income taxes asin Table 2. How much tax of each type do you pay if you earn $30,000 a year? Taking alltaxes into account, what are your average and marginal tax rates? What happens toyour tax bill and to your average and marginal tax rates if your income rises to$60,000?
With respect to the sources of state tax revenue, the corporate income tax generates approximately twice the revenue as state sales and use taxes. O True O False
1. Determine burden of the tax under different demand conditions (i.e., when demand is D 1 andwhen demand is D 2 ). Who gets most of the burden of the tax under different demandconditions?2. Prove that the increase (or change) in the price is dependent on the elasticity of demandand supply, under different demand conditions (i.e., when demand is D 1 and when demandis D 2 ).3. What tax revenue is expected by the government if the demand for cigarettes is D 1 ? Is D 2 ?
Assume that the federal government replaces the federal income tax with a national sales tax on all consumption expenditures. Analyze the impact of this tax change on taxation efficiency and equity? Note that the federal government already collects a nationwide consumption tax through excise taxes on gasoline, liquor and tobacco.
Suppose that the government imposes a tax on heating oil.Would the deadweight loss of this tax likely be greater in the first year after it is imposed or in the fifth year? Would the tax revenue collected from this tax likely be greater in the first year after it is imposed or in the fifth year? A. The deadweight loss and tax revenue would both be greater in the first year than the fifth. B. The deadweight loss would be greater in the first year than the fifth, but the tax revenue would be greater in the fifth year than the first. C. The deadweight loss would be greater in the fifth year than the first, but the tax revenue would be greater in the first year than the fifth. D. The deadweight loss and tax revenue would both be greater in the fifth year.
Suppose you are a typical person in the U.S. economy.You pay 4 percent of your income in a state incometax and 15.3 percent of your labor earnings in federalpayroll taxes (employer and employee sharescombined). You also pay federal income taxes as inTable 2 (p. 228). How much tax of each type do youpay if you earn $30,000 a year? Taking all taxes intoaccount, what are your average and marginal tax rates?What happens to your tax bill and to your average andmarginal tax rates if your income rises to $60,000?
Suppose the demand for cigarettes is Q = 15 - 0.5Pand the supply of cigarettes is Q = P - 3, where P is the price per pack of cigarettes. Suppose the government imposes a cigarette tax of $3 per pack. (a) What is the price paid by producers and price faced by consumers? (b) What is the government revenue from the tax and What is the total dollar amount of tax revenue that is ultimately paid by consumers (i.e. consumers' tax burden)? (c) What is the excess burden of the tax?
Suppose 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.
1. What is the price to be paid by the buyers after the tax is imposed? How much is the rise in the price paid by consumers? 2. What is the net price received by the sellers after the tax is imposed? How much is the fall in the price received by the producers? 3. Prove that the increase (or change) in the price is dependent on the elasticity of demand and supply. 4. Determine burden of the tax (or the incidence of the tax that falls on consumers and producer). Who gets most of the burden of the tax. Answer on the basis of elasticity. 5. How much tax revenue is expected by the government to be raised for this good per year?
Paying a tax of $15 on an income of $200, a tax of $10 on an income of $300, and a tax of $8 on an income of $400 is an example of a: O a) progressive tax. O b) b) regressive tax. O c) proportional tax. O d) constant-rate tax.