Lesson 54 - unit 11

Question 1

What are 3 purposes of taxes?

Answer 1

1. Generate revenue for the government
2. influence or regulate economic activity
3. redistribute wealth

Question 2

In 2008, what was the largest single source of Federal revenue?

Answer 2

Personal income tax.

Question 3

What does the term progressive tax mean?

Answer 3

The percentage of taxes to be paid increases as income rises.

Question 4

What does the term regressive tax mean?

Answer 4

It means that a higher percentage of income is paid in taxes at lower income levels.

Question 5

What is Pigovian tax?

Answer 5

A tax that attempts to correct for negative externalities in market activety.

Question 6

How did Walter Williams, in pursuing his self-interest, help future generations?

Answer 6

By wanting to improve his property for himself, he also improved it for future generations.

Question 7

What does Walter Willaims say taxes represent?

Answer 7

Government claims on private property.

Question 8

What constitutional amendment does Walter Williams propose?

Answer 8

Limiting peacetime federal spending to a specific, lower percentage of the Gross Domestic Product.