Question 1

Which of the following do the authors cite as an example of a regressive form of taxation?

Accepted Answer

The authors specifically mention the sales tax as an example of a regressive form of taxation, as it disproportionately affects those with lower incomes who spend a bigger portion of their income on taxable items.

Question 2

Subsidies are incentives designed to ______ the production or purchase of certain goods.

Accepted Answer

Subsidies are intended to stimulate production or purchase of certain goods by providing financial assistance to producers, which helps in making these goods more affordable and accessible to consumers.

Question 3

What is the primary source of Texas's Rainy Day Fund?

Accepted Answer

The primary source of Texas's Rainy Day Fund is oil and gas taxes. These taxes are levied on the production, transportation, and refining of oil and natural gas within Texas. The revenue generated from these taxes is deposited into the Economic Stabilization Fund, commonly known as the Rainy Day Fund, which serves as a reserve for the state.

Question 4

Which of the following characteristic is accurate regarding regressive taxation?

Accepted Answer

Regressive taxation places a higher burden on lower income individuals, and Texas's heavy reliance on sales tax is an example of regressive taxation.

Question 5

Which type of tax was expanded in 2006 to fund public education?

Accepted Answer

In 2006, the franchise tax was expanded to fund public education. This was part of a broader effort to reform school finance in some states, aiming to increase funding for public schools through business taxes.

Question 6

Sin taxes are ______.

Accepted Answer

Sin taxes are taxes on products such as alcohol and tobacco, as well as activities such as gambling, that legislators would like to discourage due to their perceived negative impact on individuals or society.

Question 7

The authors describe Texas as a "pay-as-you-go" state. What does the phrase "pay as you go" mean?

Accepted Answer

"Pay as you go" means that expenses are paid for with available funds and not with borrowed money. In the context of the Texas state government, this means that the state is required to have a balanced budget and cannot spend more than it takes in through revenue sources. This helps to limit the amount of debt the state accrues.

Question 8

Although the lottery is unpopular among many groups, why does it remain a revenue source for Texas?

Accepted Answer

Eliminating the lottery would result in a loss of revenue, which would require spending cuts or raising other taxes to make up for the shortfall. While lottery revenue is significant, it is not the only source of funding for the state, nor is it the only funding source for education. The state constitution does not require a proportion of revenue to come from gambling, and the argument that the lottery is the only way out of poverty is not supported by the evidence.

Question 9

Which of the following statements is true regarding taxation and the cost of building and maintaining roads over the past twenty years?

Accepted Answer

Tax revenue for highways has not kept up with the increasing costs of building and maintaining roads. This has been a major issue in Texas, which has experienced significant population growth and increased demand for transportation infrastructure. Despite this, the state gasoline tax has not been adjusted since 1991, and the federal gasoline tax has not been increased since 1993. As a result, the funds available for highway construction and maintenance have not kept pace with the rising costs of materials, labor, and other expenses.

Question 10

Whereas redistributive policy ______, distributive policy ______.

Accepted Answer

Redistributive policy involves intentionally moving benefits from one group to another, such as through income redistribution or welfare programs. Distributive policy, on the other hand, aims to distribute benefits and resources more broadly across society, without necessarily targeting a specific group. Examples of distributive policies include funding for public education or infrastructure projects.

Question 11

A tax on real estate is a(an) ______.

Accepted Answer

A tax on real estate is called a property tax. This tax is usually assessed by local government authorities and is based on the value of the property being taxed.

Question 12

Texas relies on sources of revenue other than taxes. Which of the following is accurate regarding these other sources of revenue?

Accepted Answer

Grants from the federal government are a significant source of revenue for Texas, making up a substantial portion of the state's revenue. This helps fund various state programs and services.

Question 13

Which of the following accurately describes the agenda-setting step in the policymaking process?

Accepted Answer

Agenda-setting is the step in the policymaking process in which policymakers prioritize the various problems facing the state. They determine which issues are most pressing and require their attention. This step helps policymakers focus their efforts and resources on the issues that are most important to address through the policymaking process.

Question 14

Which of the following describes the severance tax?

Accepted Answer

The severance tax is a tax on the extraction of natural resources, such as oil, gas, or coal. It is imposed on the company or entity that extracts the natural resource, typically at the point of extraction. The tax is designed to compensate the state or federal government for the depletion of non-renewable resources and to provide revenue for public services and programs.

Question 15

Which of the following accurately describes the policy adoption step in the policymaking process?

Accepted Answer

Policy adoption is the step in the policymaking process where policymakers take formal administrative action to enact a policy. This can include passing legislation, issuing executive orders, or adopting regulations.

Question 16

Which of the following is NOT a tax levied on Texans by their state?

Accepted Answer

Texas is one of the few states in the US that does not have a state income tax. The other options (severance tax, excise taxes, franchise tax, and property taxes) are all taxes that are levied on Texans by their state government.

Question 17

The authors list three types of policies at the beginning of the chapter. Which of the following is a type of policy mentioned?

Accepted Answer

The authors list three types of policies at the beginning of the chapter and one of them is "redistributive policy". The other options listed, such as punitive policy, extraconstitutional policy, gubernatorial policy, and facilitative policy, are not mentioned as types of policies in the chapter.

Question 18

Which of the following accurately describes the policy implementation step in the policymaking process?

Accepted Answer

The answer of Which of the following accurately describes the...

Question 19

A bill cannot be considered passed by the Texas Legislature unless the ______ has authorized that the amount to be spent by the bill is available.

Accepted Answer

The comptroller is responsible for determining the availability of funds to be spent by the state government, so their authorization is required for a bill to be considered passed by the Texas Legislature. The other officials listed do not have this responsibility.

Question 20

The state's largest source of investment income comes from ______.

Accepted Answer

The Permanent School Fund is a state endowment fund that generates investment income to support education in Texas. It is the largest source of investment income for the state.

Quiz 12: Fiscal Policy