EC 335
Terms
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- Approximately what percent of individuals in the United States have no health insurance?
- 14%
- Suppose there is a flat 20% income tax rate, but otherwise U.S. tax law is the same that is currently in place. You make $40,000 per year. If your employer pays for your $4,000 per year insurance policy and deducts the expense from your salary, your after
- $36,800 and $28,800
- Suppose that a healthy individual has worked for 10 years in Medicare-covered employment. At what age can this individual start receiving Mecicare?
- Age 65. Social Security is age 62.
- The majority of recipients of Medicaid are _____. The majority of the costs of Medicaid are associated with the benefits received by____.
- Low-income mothers and children. Low-income elderly.
- Which of the following has been found to be the primary cause of rapid rise in health care costs?
- Technological change in the delivery of health care.
- In the United States from 1980 to the present, the share of income accruing to the bottom income quintile _____ and the share accruing to the top income quintile ____.
- Fell. Grew.
- Which of the following describes welfare programs that deliver certain goods to recipients?
- In-kind welfare
- Which of the following is true if the benefit reduction rate of a welfare program is reduced?
- Participation is possible over a wider range of incomes, the cost of the welfare program will go up, and to maintain the same program cost, the benefit guarantee must fall.
- The primary insurance amount in Social Security is determined by what?
- Adjusting your average indexed monthly earnings by percentages set by Social Security.
- Who is eligible to receive Social Security Benefits?
- Any individual who earned above a minimum amount of money for at least 40 quarters (10 years) and paid into the social security system.
- The group comprising the highest percentage of the poor is whom?
- Children.
- Who is eligible to receive food stamps?
- Poor families without children, childless single men, childless single woman (All of the above)
- The Earned Income Tax Credit (ETIC) does what?
- It provides additional tax credits to low income workers.
- What two situations will cause a tax levied on producers to be fully borne by producers?
- 1. Demand is perfectly elastic. 2. Supply is perfectly inelastic.
- Consumers bear more of a tax as demand becomes more ____ and supply becomes more _____.
- Inelastic. Elastic.
- What is true about a $1 tax on gasoline?
- The producer tax burden is the same regardless of on whom the tax is imposed.
- How can we be sure an in-kind transfer is valued at its cost by the recipient?
- Keep the size of the transfer smaller than the amount usually consumed.
- A proportional income tax has an average tax rate that ______.
- Always equals the marginal tax rate.
- If the supply of labor is perfectly inelastic, then the incidence of a payroll tax levied entirely on employers will be _____.
- Paid entirely by workers.
- The Ramsey Rule is used to find what?
- The efficient level of Q and optimal taxation.
- Goods should be taxed in _______ proportion to their _______ (Ramsey Rule)
- INVERSE proportion to their DAMAND
- What is a per-unit tax?
- Pigouvian Tax
- What does a Pigouvian Tax do?
- It imposes a per-unit tax on a good, generating negative externalities equal to the marginal externality at the socially efficient quantity
- Adverse selection in health insurance has to do with what?
- Asymmetric information, which leads to moral hazard.
- What is the gross replacement rate?
- The monthly benefit divided by monthly earnings.
- A spouse receives how much of a worker's full social security benefits?
- 50%
- What are the 3 sources of tax erosion?
- 1. Exclusions 2. Deductions 3. Exemptions
- Haig-Simons says that income equals
- Consumption + change in wealth over a period of time
- Tax expenditure from employers contributions to what is the largest? What is the second largest?
- Medical insurance ($161 billion) and exclusion of pension earnings (98.4 billion)
- What is the type of income that doesn't get reported?
- Exclusions, including State and local bonds, unrealized gains, and the inputed income on owner-occupied homes.
- What are deductions?
- They allow you to reduce taxable income by doing certain things.
- What are important deductions?
- Mortgage interest, charitable contributions, and local income and property taxes
- Owner-occupancy is what in the tax system?
- Encouraged
- Inputed rent is not subject to what?
- The PIT
- Economists favor using the what as the unit of account for income tax?
- Individual
- Reducing tax rates increases tax revenue (Laffer curve) True or False?
- Basis in theory but never been observed. False
- Tax on interest has offsetting ____ and _____ effects.
- Income and Substitution.
- Gifts and inheritances _______ subject to the PIT but are subject to taxation under ______
- Are not. The Unified Transfer Tax.
- The projected MI gap by 2017 is _____ for the GF.
- $6 billion
- The projected MI gap by 2017 is ______ for the SAF.
- $3.6 billion
- What are the largest SAF revenue source?
- Sales taxes
- How much have sales taxes increased since FY00
- 4.2%
- The over 65 age group will ______ by 2.8% a year while the other age groups will _____.
- Increase. Decline.
- The over 65 group generally pays _____ tax. (Little or a lot)
- Little, because SS and pension income are not taxed.
- The largest spending pressures in MI come from what in the GF?
- Medicaid and corrections
- What is the main factor behind K-12 spending pressure?
- Health care coverage for active and retired employees.
- K-12 aid is provided on a _____ basis and is expected to ____ by 2017.
- Per-pupil. Decline (to 1.45 million)
- What is the largest program operated by state employees?
- Corrections
- What is the average cost per prisoner in MI?
- $30,000
- What tax was increased in 1997 and what is the state of its revenue now?
- The gasoline tax. Revenue has been eroded by inflation and slow growth.
- What would be an equitable and efficient way to increase tax revenues?
- A graduated income tax