Exercises And Problems. The Share Of The Government In Distribution (Taxation)

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This section is from the book "Elementary Economics", by Charles Manfred Thompson. Also available from Amazon: Elementary Economics.

Exercises And Problems. The Share Of The Government In Distribution (Taxation)

A

1. Why are there often so many taxing bodies in a community?

2. What only restricts the power of Congress to lay taxes?

3. Is this restriction important? Why, or why not?

4. In what ways are taxing powers of local units limited ?

5. Why should the right of a school district to tax itself be regulated by state law?

6. Are these regulations desirable ? Explain.

7. Account for the increase in the revenues of the national government during the past half century.

8. What is the chief money-spending function of the national government ?

9. What are the principal revenue sources of the school district? the county? the city?

10. What is the justification for government expenditures where private funds would otherwise be used?

11. What risks are involved in government expenditures?

12. Why, or why not, should taxes be levied according to benefit?

13. What is the relation between the need of public assistance and the ability to pay taxes?

14. Why should a school tax levied according to the benefit principle be impracticable?

15. How does the ability principle of taxation tend to equalize incomes?

16. What is the essential difference between a proportionate tax and a progressive tax?

17. What are the merits of each?

18. Just what is meant by "expediency" in taxation?

19. Why is an old tax usually preferred to a new tax?

20. When is a tax said to be "shifted"?

21. Why are taxes usually easy to shift ? Explain.

22. Which taxes are the easiest to shift? Why?

23. What is a "general property tax"?

24. What are its chief defects?

25. Why do many people, otherwise honest, falsify their personal property tax-schedules ?

26. Why should income taxes and inheritance taxes be confined to the well-to-do classes?

27. What is the essential difference between an income tax and an inheritance tax?

28. Just why was a constitutional amendment necessary to legalize a federal income tax?

B

1. Get from the local tax-collector or from the proper county official, information concerning rates of taxation, purposes for which various taxes are imposed, the cost of collection, and the attitude which people take toward each kind of tax.

2. Interview some friendly taxpayer.

a. How does he regard the school tax?

b. Has he suggestions to offer concerning changes in taxation ?

c. Does he consider the valuation placed on his own property for taxing purposes equitable compared to the valuation placed on his neighbors' properties ?

d. Get his opinion on the weakness and strength of the general property tax.

3. Make a list of enterprises supported out of public funds, which enterprises provide services free to all, regardless of their tax-paying abilities.

4. Secure, if possible, published lists of personal property assessments.

a. Do there appear to be any discrepancies between the valuation placed on the personal property of any individual and the amount of personal property he is reputed to possess?

b. How does the total valuation of personal property compare with the total valuation of real estate for the same area?

c. Is there in your community a limit below which personal property is not assessed? If so, why?

5. Inquire of some tax-assessing official about the difficulties of determining property values, the inclination of people to undervalue their own property, the general dissatisfaction with valuations, and the criticism made of them.

6. Suppose you were a member of a lawmaking body which had before it a bill for taxing boarding-house keepers ten dollars a year each, on the ground that the money thus raised in each city would pay the salary of a boarding-house inspector for that city.

a. What is your first reaction on the question ?

b. Do boarding-houses need to be inspected? Why?

c. If so, who should pay the expense of inspection? Why?

d. How would the fact that you represented a college town or a mining district affect your vote?

e. How would you expect members from rural districts to vote ?

C

1. The property of the residents of a certain section of one of the largest cities in the United States is taxed by twenty-seven taxing boards.

a. Why have so many taxing boards been developed?

b. Is it probable that one taxing body could accomplish the same purpose ? Explain.

c. Would you expect the aggregate rate to be higher in one case than in the other? Why, or why not?

2. In the matter of official patronage, measured either in numbers or in salaries, the Mayor of New York City ranks alongside the President of the United States.

a. Account for this fact.

b. Compare the receipts and expenditures of the two organizations.

c. Contrast the governmental functions of the two organizations.

3. The argument is often advanced that each should be taxed according to the benefit he gets from the expenditure of public money.

a. What effect do good schools have on the number and character of the people in the community?

6. How does an increase in population together with a rise in its standards affect property values? legitimate business?

c. What return, then, does a childless property-owner or a childless business man get from his school taxes ?

4. The administration of a tax levied according to the benefit principle would be extremely difficult.

a. When should each property holder pay his taxes for the support of a city fire department ?

b. What should each pay toward maintaining a public park? a health bureau ?

c. Why should not nonresident owners of vacant lots be entirely exempt from such taxes ?

5. The statement that a land tax cannot be shifted needs to be examined with care. Would the shifting be possible if the tax collected were spent on building improved wagon roads? Can you think of other expenditures that might add to the productiveness of the land taxed, and hence increase its economic rent?