Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 12, Problem 1QR
To determine
The trend of government tax revenue over the past century.
Expert Solution & Answer
Explanation of Solution
The government tax revenue has increased more rapidly than the rest part of the economy over the past century due to improvement in the efficiency of the tax rate. Therefore, the ratio of government revenue to
Economics Concept Introduction
Concept introduction:
Tax: It is the unilateral payment made by the public towards the government. There are different types of taxes in the economy that include income tax, property tax, and professional tax etc.
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Chapter 12 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
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Similar questions
- Describe the three distinct terms to describe the tax rates?arrow_forwardDoes tax cuts reduce tax revenue?arrow_forwardDiscuss the taxation system of the United States. What kind of system does the U.S currently employ? What are the differences between direct and indirect taxes? What flaws does our tax system have, if any?arrow_forward
- Do you think taxpayers would be willing to pay higher property taxes if the revenue is earmarked for a specific purpose?arrow_forwardWhich system of taxes is best? Why does that system is the most effective way for the government to generate revenue and maintain our economy's growth?arrow_forwardwhy is the tax rate 6?arrow_forward
- Which of the following is NOT a reason that governments impose taxes? To finance government spending To influence the behavior of households and firms To alter the distribution of income in society These are all reasons why governments impose taxesarrow_forwardIn 1989, Senator Bob Packwood asked Congress’s Joint Committee on Taxation how much extra revenue the government would raise if it just started taxing 100% of all income over $200,000 per year. The Joint Committee crunched some numbers and reported an answer: $204 billion per year. a. What is wrong with this answer? In 1989, very few people made over $200,000 a year, so the estimate of the tax revenue is far too high. Increasing government spending by $204 billion each year would have generated economic growth, and subsequently even higher amounts of tax revenues. The Joint Committee on Taxation did not have the tools needed to make such an estimate accurately. No one would have an incentive to work once they had earned $200,000, so much of the taxable income would disappear.arrow_forwardHow can tax incidences have a positive and negative impact on the economy?arrow_forward
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