The text book is essential to completing the assignment

The text book is essential to completing the assignment ECN 231 ASSIGNMENT 9 Chapter 12 The Public Sector Additional resources: Policy Basics: Where Do Our Federal Tax Dollars Go? Center on Budget and Policy Prio rities, March 11, 2015 . http://www.cbpp.org/cms/?fa=view&id=1258# Government Revenue and Expenditures 2014 Source for Federal Government Revenue and Expenditures This link takes you to the data from Historical Tables: http://www.whitehouse.gov/omb/budget/Historicals Several good articles here . Start with “Tax Systems”, it covers the benefits received and ability to pay principles of taxation. Then look around at other articles you find interesting. http://www.shmoop.com/taxes/ Due date: April 6, 2015 35 points In this assignment you will learn to: ? Describe changes in governments spending over time ? Describe the largest federal government expenditures and revenue sources ? Compare US government expenditures and taxation to those in other countries ? Contrast progressive, regressive, and proportional taxation ? Contrast the average tax rate and marginal tax rate ? Exp lain why certain taxes are progressive or regressive ? Explain the majority rule problem ? Describe the special - interest group effect ? Explain rational voter ignorance ? Explain bureaucratic efficiency ? Describe the shortsightedness effect Introduction There is a lot of misunderstanding about government spending and taxation. Many people believe government is too big, growing too fast, and taxes are always going up. This chapter gives you some facts about spending and taxes so you can make up your own mi nd. You will also learn about the situations where government is inefficient when it allocates resources through the political process. Practice On pp. 351 - 3 Sample Quiz questions 2 through 8 , 14, 15, and 17 through 20 are good practice for this assignment. Answers are in the back of the textbook. 1. Total government spending is about 38% of GDP. Use Exhibit 1 to calculate what percentage of GDP is spent by the federal government and what percentage is spent by state and local governments. 2 points 2. Use Exhibit 6 to answer this question. How have taxes as a percent of GDP changed since the end of WWII? Which has changed more, state and local taxes or federal taxes? 3 points 3. Look at “ Policy Basics: Where Do Our Federal Tax Dollars Go?” and Exhibit 2 in the textbook. Note how Income Security has become the largest type of federal spending. What exactly is included in Income Security? What do you think might have caused the growth in spending in this category? 5 p oints Articles at this link will help with questions 4 and 5 http://www.shmoop.com/taxes/ 4. Suppose the government placed a tax on cigarettes and used the money to treat lung cancer patients. Explain how this ta x based would be an example of the benefits received principle. 5 points 5. Explain how the Federal income tax follows the ability to pay principle. 5 points 6. If you got a $1000 bonus in your paycheck and you wanted to know how much extra income tax you have to pay would you use the average tax rate or the marginal tax rate? Explain why. 5 points 7. Answer one of the following 5 points: a. Explain why the Social Security (payroll) tax is regressive. b . Explain why sales taxes are regressive. 7. Answer one of the following. 5 points a. Often government projects are put to a vote to “let the people decide”. Explain why a majority of voters might reject a project where benefits are greater than costs . b. Explain why politicians support programs that only benefit a small number of people in a special interest group . Why don’t voters vote against these politicians? c. In Michigan voters elect the state Board of Education. Explain why most voters will be uninformed about the candidates for the Board. The text book is essential to completing the assignment ECN 231 ASSIGNMENT 9 Chapter 12 The Public Sector Additional resources: Policy Basics: Where Do Our Federal Tax Dollars Go? Center on Budget and Policy Prio rities, March 11, 2015 . http://www.cbpp.org/cms/?fa=view&id=1258# Government Revenue and Expenditures 2014 Source for Federal Government Revenue and Expenditures This link takes you to the data from Historical Tables: http://www.whitehouse.gov/omb/budget/Historicals Several good articles here . Start with “Tax Systems”, it covers the benefits received and ability to pay principles of taxation. Then look around at other articles you find interesting. http://www.shmoop.com/taxes/ Due date: April 6, 2015 35 points In this assignment you will learn to: ? Describe changes in governments spending over time ? Describe the largest federal government expenditures and revenue sources ? Compare US government expenditures and taxation to those in other countries ? Contrast progressive, regressive, and proportional taxation ? Contrast the average tax rate and marginal tax rate ? Exp lain why certain taxes are progressive or regressive ? Explain the majority rule problem ? Describe the special - interest group effect ? Explain rational voter ignorance ? Explain bureaucratic efficiency ? Describe the shortsightedness effect Introduction There is a lot of misunderstanding about government spending and taxation. Many people believe government is too big, growing too fast, and taxes are always going up. This chapter gives you some facts about spending and taxes so you can make up your own mi nd. You will also learn about the situations where government is inefficient when it allocates resources through the political process. Practice On pp. 351 - 3 Sample Quiz questions 2 through 8 , 14, 15, and 17 through 20 are good practice for this assignment. Answers are in the back of the textbook. 1. Total government spending is about 38% of GDP. Use Exhibit 1 to calculate what percentage of GDP is spent by the federal government and what percentage is spent by state and local governments. 2 points 2. Use Exhibit 6 to answer this question. How have taxes as a percent of GDP changed since the end of WWII? Which has changed more, state and local taxes or federal taxes? 3 points 3. Look at “ Policy Basics: Where Do Our Federal Tax Dollars Go?” and Exhibit 2 in the textbook. Note how Income Security has become the largest type of federal spending. What exactly is included in Income Security? What do you think might have caused the growth in spending in this category? 5 p oints Articles at this link will help with questions 4 and 5 http://www.shmoop.com/taxes/ 4. Suppose the government placed a tax on cigarettes and used the money to treat lung cancer patients. Explain how this ta x based would be an example of the benefits received principle. 5 points 5. Explain how the Federal income tax follows the ability to pay principle. 5 points 6. If you got a $1000 bonus in your paycheck and you wanted to know how much extra income tax you have to pay would you use the average tax rate or the marginal tax rate? Explain why. 5 points 7. Answer one of the following 5 points: a. Explain why the Social Security (payroll) tax is regressive. b . Explain why sales taxes are regressive. 7. Answer one of the following. 5 points a. Often government projects are put to a vote to “let the people decide”. Explain why a majority of voters might reject a project where benefits are greater than costs . b. Explain why politicians support programs that only benefit a small number of people in a special interest group . Why don’t voters vote against these politicians? c. In Michigan voters elect the state Board of Education. Explain why most voters will be uninformed about the candidates for the Board.