Public Budgeting and Finance

An example of discretionary spending would be: -Medicare -Social Security -Federal highway spending -Unemployment Compensation

Federal highway spending

Which of the following is NOT an advantage of income taxation?

Income taxation remains constant when the economy contracts

Under the current federal individual income tax law, which of the following would be an exclusion?

Interest paid on a bond issued by a state government before 1986

Federal entitlement programs are: -Discretionary Spending -Mandatory spending -Appropriated spending -Authorized spending

Mandatory spending

Which of the following is a means-tested entitlement program? -Medicare -Medicaid -Social Security -Temporary Assistance for Needy Families (TANF)

Medicaid

A taxpayer may legally avoid paying federal income tax by: -Receiving income in kind, not in cash -Working for a non-profit organization -Collecting income only from non-labor sources (stock dividends, bank interest, etc)

None of the above

The marginal tax rate equals

The amount by which a taxpayer's tax would increase from an additional dollar of the tax base

Which of the following statements about federal government finances is NOT correct?

The corporate income tax is currently the second largest source of total revenue for the federal government

Which of the following statements is correct?

The federal government in the United States levies no general sales tax

Which of the following are advantages of income taxation?

-Income taxes yield substantial amount of revenue -Income taxation entails low collection costs -Income is a reasonable measure of individual capacity to bear the cost of government

Which statements about the federal government finances ARE correct?

-The federal government levies no general sales tax -The federal government levies three general types of income taxes

The largest single source of tax revenue to local governments is:

the real property tax

Some federal outlays are determined to be legally "uncontrollable" because -important political pressure groups want the services they provide -they do not go through the annual appropriation process -having been in the prior year appropriation they will not be carefully reviewed in later years -legislators do not like change

they do not go through he annual appropriation process

The individual income tax became a permanent feature (at least so far) of the federal tax structure in:

1913, just before WWI

Indexation of individual income taxes is designed to

Prevent bracket creep

Which of the following is not an option for restraining mandatory spending?

Reducing the budget appropriation

Which statement about federal mandatory spending is accurate?

Spending for social security benefits is officially mandatory

Which of the following is not discretionary spending under the rules of BEA90? -Spending for the Department of Defense -Spending for the social security benefits -Spending for the EPA -Spending for homeland defense

Spending for the Social Security benefits

The federal government may levy an individual income tax without the need to apportion among the states because:

The sixteenth amendment allows such taxes without apportionment

Which of the following statements are accurate? -Five states do not have a general sales tax -Not all states have individual income taxes -Not all states have corporate income taxes

all are accurate