Deck 12: Financing State Government

Question 1

Almost three-quarters of the states that do not have a personal income tax system are

A) among the "Terrible Ten."
B) progressive in their overall tax system.
C) in the Old South.
D) on the east coast.

Answer 1

A

Question 2

________ refers to the items that are subject to taxation.

A) Estates
B) The tax base
C) Taxation without representation
D) Real property

Answer 2

B

Question 3

A sales tax,especially when food and medicine are subject to the tax,can be described as what type of tax?

A) business
B) regressive
C) progressive
D) point of purchase

Answer 3

B

Question 4

Tax shifting could result in any of the following EXCEPT

A) higher prices.
B) lower pay to workers.
C) higher profits to owners.
D) lower returns to investors.

Question 5

About 60% of the money that Texas receives from the federal government is spent on

A) health and human services.
B) public safety.
C) education.
D) transportation.

Question 6

Which of the following is a fundamental principle governments use to justify providing services to the public?

A) redistributive goods
B) nonexhaustion
C) tax capacity
D) regulatory goods

Question 7

Which of the following categories of taxes contributed the most to the Texas treasury in 2011-2012?

A) oil and natural gas production
B) franchise
C) motor vehicle sales and rental
D) sales

Question 8

Which category of Texans,by income,pays the lowest amount of sales and excises taxes as a percentage of income?

A) lowest 20%
B) second lowest 20%
C) middle 20%
D) second highest 20%

Question 9

Which of the following is a consumer tax?

A) sales tax
B) tobacco tax
C) motor vehicle sales tax
D) All of these answers are correct.

Question 10

Which of the following states had the highest taxable resources per capita in 2011?

A) Texas
B) Florida
C) California
D) South Carolina

Question 11

In Texas,citizens can be excluded from all of the following for nonpayment,EXCEPT for

A) water.
B) education.
C) sewer.
D) electricity.

Question 12

Which category of Texans,by income,pays the highest amount of sales and excises taxes as a percentage of income?

A) lowest 20%
B) second lowest 20%
C) middle 20%
D) second highest 20%

Question 13

What is the primary point missed by the per capita tax measure?

A) tax exporting
B) tax base
C) tax effort
D) tax capacity

Question 14

Which of the following categories of taxes contributed the least to the Texas treasury in 2011-2012?

A) insurance occupation
B) franchise
C) motor vehicle sales and rental
D) sales

Question 15

For fiscal year 2015,the Texas state budget was about $___ billion.

A) 37
B) 64
C) 100
D) 134

Question 16

In a comparison of the 15 most populous states,where did Texas rank in the amount of revenue raised per $1,000 of personal income?

A) It was the median.
B) highest
C) near the lowest
D) near the highest

Question 17

What is the primary source of revenue for state governments?

A) service charges or fees
B) federal grants
C) taxes on citizens
D) taxes on corporations

Question 18

What percentage of the Texas state budget comes from the federal government?

A) 21 percent
B) 34 percent
C) 45 percent
D) 54 percent

Question 19

On average,what percentage of state and local government revenue across the country comes from state and local sources?

A) 23 percent
B) 43 percent
C) 57 percent
D) 75 percent

Question 20

Which of the following is the measure of the wealth of a state or its ability to raise revenues relative to all other states?

A) tax exporting
B) tax base
C) tax effort
D) tax capacity

Question 21

What is the second-largest source of revenue for Texas state government?

A) service tax
B) income tax
C) sales tax
D) franchise fee

Question 22

Local governments collect and pay for ________ the cost of government in Texas.

A) about one-quarter
B) about one-third
C) about one-half
D) about three-quarters

Question 23

What are the two primary sources of revenue for local government in Texas?

A) property tax and state grants
B) block grants and local sales tax
C) local sales tax and property tax
D) income tax and state sales tax

Question 24

What are the top two expenditure categories of Texas government? Does the federal government help provide funds for these expenditures,and if so,how important is the federal government's help?

Question 25

What are collective benefits? Why do governments provide them?

Question 26

When the price of oil experiences a prolonged price increase,

A) the Texas economy improves and Texas state revenues increase.
B) the Texas economy improves and Texas state revenues decrease.
C) the Texas economy suffers and Texas state revenues increase.
D) the Texas economy suffers and Texas state revenues decrease.

Question 27

Define and compare regressive taxes,progressive taxes,and proportional taxes.Which type of tax is most common in Texas? Why?

Question 28

The greatest source of nontax revenue in Texas comes from

A) fees, fines, licenses, and penalties.
B) lottery income.
C) interest income.
D) land income.

Question 29

Which of the following taxes CANNOT be shifted?

A) personal income tax
B) business tax
C) property tax
D) franchise tax

Question 30

During the 1980s there were 10 special sessions of the Texas legislature to correct revenue shortfalls.What was the cause of these shortfalls?

A) inflation
B) reduction in federal grants under President Reagan
C) declining price of oil
D) white flight to the suburbs

Question 31

In recent years,most of the growth in state expenditures in Texas has been driven by

A) inflation.
B) population increases.
C) the cost of healthcare.
D) public safety costs.

Question 32

Explain how the selective use of sales tax in Texas contributes to the regressive nature of its tax structure.

Question 33

Discuss tax shifting,and cite specific examples showing how the burden of property and business taxes can be shifted.

Question 34

Define income-elastic taxes.Discuss how Texas's tax base affects the state's tax revenues.

Question 35

What is meant by income-elastic taxes?

A) taxes that change quickly relative to economic conditions
B) taxes that can easily stretch to meet funding shortfalls
C) taxes that change slowly relative to economic conditions
D) taxes that have been given a special "elastic" designation as part of the budget "fix"

Question 36

Health and human services is funded primarily with

A) property taxes.
B) the lottery.
C) special excise taxes.
D) federal grants.

Question 37

Which level of government is most heavily dependent on service charges and fees to finance their services?

A) federal
B) state
C) county
D) city

Question 38

How are school districts funding their increased share of the cost of local education?

A) higher local property tax
B) the lottery
C) special excise taxes
D) federal grants

Question 39

How many states do not have any form of personal income tax?

A) 2
B) 7
C) 13
D) 19

Question 40

Compare and contrast benefit-based taxes and taxation based on the ability to pay.

Question 41

What are the main suggestions for increasing government revenue? Pick two and discuss the pros and cons of each.

Question 42

Name and describe the form of corporate "income tax" Texas uses.To whom does it apply? How has it changed since its creation?