What are four criticisms of the single tax on land?
What will be an ideal response?
First, a single tax on land would not be adequate to raise sufficient revenues to meet government spending needs. Second, there is the difficulty of identifying the portion of rent in incomes from land. Some of the income comes from productive improvements in the land and is not solely economic rent. Third, there are conflicting interpretations of unearned income. Landowners are not the only persons receiving “unearned” incomes. People who hold stock can obtain “capital gains” and people earn “interest” on funds in bank accounts. Why should the landowner be the only one to pay tax on unearned income? Fourth, the ownership of land changes over time. Taxing current owners may not be fair if the past owners were the ones to enjoy the large increase in land rent.
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Tom and Jerry are the only members of society. The table above shows their marginal benefits from defense satellites, a public good. If the marginal social cost of a satellite is $95, the efficient quantity of satellites is
A) 0. B) 1. C) 2. D) 3.
For complementary goods, an increase in the price of one results in a decrease in demand for the others
Indicate whether the statement is true or false
What is a major criticism of corrective taxes?
a. They are done for political reasons rather than reducing externalities. b. They place most of the burden on the worst offenders. c. They unfairly burden the wealthy to pay for the actions of others. d. They disproportionally impact low-income people.
Since 1970, the U.S. Gini ratio has
A) increased. B) decreased. C) increased and then decreased. D) decreased and then increased.