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PA 581 Quiz Week 6 Keller

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PA 581 Quiz Week 6 Keller


PA 581 Quiz Week 6 Governmental Budgeting and
Finance Keller
(TCO D) A residence in Brevard County has an
assessed value of $150,000. Its owner qualifies
for an old age exemption of $10,000 and a
homestead exemption of $20,000. The property

tax rate is $5 per $100 AV. What will be the


property tax bill on this property?
$7,500
$7,000
$6,500
$6,000
(TCO E) The Federal government taxes
consumption mainly through:
General retail sales taxes.
Value added taxes (VAT).
Selective excise taxes.
Payroll taxes.
(TCO E) With reference to tax systems, the
principle ofcollectability asserts that:

A tax must be collected at a reasonable cost to


society.
A tax must be collected by the government agency
which imposed the tax.
A tax must be collected within 90 days of its
imposition.
A tax must be paid by cash, check, money order, or
electronic transfer.
(TCO E) Which of the following pieces of
evidence would by itself allow a judgment about
the regressivity or progressivity of a tax? (4
points)
High-income families have higher tax bills than do
low-income families.

The richest 5 percent of the population pay 30


percent of the total tax collected.
Per-capita tax payments by rich families are higher
than per-capita tax payments by poor families.
Low-income families pay out a higher proportion of
their income in the form of tax than do high-income
families.
(TCO G) Line-Item budgets:
Link specific outcome measures to requests for
funds.
Do not focus on measurable activities.
Classify the budget by goals and objectives such as
protection of persons or improved transportation.
Classify the budget in terms of objects of
expenditure.

(TCO G) Program Budgets:


Link specific outcome measures to requests for
funds.
Do not focus on measurable activities.
Classify the budget by goals and objectives such as
protection of persons or improved transportation.
Classify the budget in terms of objects of
expenditure.
(TCO H) Capital programs are an important part
of governmental budgeting and
finance. (A) Briefly distinguish between an
operating budget and a capital budget . (15
points) (B) Develop a convincing case as to why
it is appropriate for governments to prepare two
separate budgets: an operating budget and a

capital budget. Cite at least two reasons. (15


points)
A budget details a financial plan for government. The
government breaks down the plans into two types;
an operating plan and
(TCO H) Capital projects play a very important
part in government at all levels. (A) Distinguish
between capital outlay and capital budgets . Is
capital outlay normally a part of the operating
budget or operating budget? (15
points) (B) Provide five examples of capital
outlay expenditures . Provide five examples of
capital projects. (15 points) (Points : 30)
(TCO E) The City of Champions has a
referendum that will go before voters to build the
best football stadium in the world. The ballot

calls for the voters to approve or disapprove a


6% sales tax increase to construct the new
stadium. The stadium is estimated to cost
$800,000,000. However, the sales tax increase
will generate more than $1.1 billion dollars. The
disposition of the excess funds is unclear. (A)
What standards of equitability apply in this
case? (10 points) (B) Describe each standard
and explain why it applies and whether the
standard has been violated. (20 points)
The standards of equitability is horizontal, vertical,
adequacy, collectability, transparency, and economic
effects. In the
(TCO E) Keller works within the City and County
of Denver and lives in the suburbs. His employer
deducts $6.00 per month from his salary for
deposit in the Denver budgetary revenue

accounts. He has no choice in the matter; the


only way he could legally avoid it would be to
either move into Denver or take a job outside the
Denver confines. The tax being referred to is
called a head tax or a flat tax since it is a
constant dollar amount assessed on every living,
breathing employee in Denver who does not
have residence there. (A) Using your own
numbers, show clearly why such a tax is
regressive. (15 points) (B) Using one of the
equity standards, develop an argument making a
case that Denver could use to justify the
imposition of such an annoying tax. (15
points) (Points : 30)
(TCO E) Al has an income of $40,000; Bettys
income is $200,000 . With no sales tax in place,
Al spends $7,000 on grocery food and Betty

spends $12,000. (A) If the state government now


taxes all grocery food at 10%, and these two
folks do not reduce their food purchases
whatsoever, then is this sales
tax proportional, progressive,
orregressive? SHOW AND LABEL ALL WORK,
and interpret the numerical results. (15
points) (B) If the above policy is changed such
that now Al receives a tax credit of $200 at the
end of the year, will your conclusion change?
Again, SHOW AND LABEL ALL WORK, and
interpret the numerical results. (15 points)
(TCO E) Al has an income of $70,000 while
Bettys income is $30,000 . With no sales tax in
place, Al spends $7,000 on grocery food and
Betty spends $4,000. (A) If the state government
now taxes all grocery food at 10%, and these two

folks do not reduce their food purchases


whatsoever, then is this sales tax proportional,
progressive, or regressive? SHOW AND LABEL
ALL WORK, and interpret the numerical results.
(15 points) (B) If the above policy is changed
such that now and Betty receives a tax credit of
$100 at the end of the year, will your conclusion
change? Again, SHOW AND LABEL ALL WORK,
and interpret the numerical results. (15
points) (Points : 30)