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Citizen groups that monitor taxes paid by different corporations often complain about the low average tax rates. Who may really benefit from such leasing?
Who benefits from the fact that state and municipal bonds are tax-exempt-the buyer of the bond, or the municipality that issues them?
The return on the amount in the savings program accumulates free of tax-just like an IRA. Explain how insurance can be used as a tax avoidance device.
Which assets are likely to decrease in value? Which to increase in value? Should the government do anything to compensate the losers or to tax the gainers?
Discuss the inequities and inefficiencies that would arise from a consumption tax which had increasing marginal tax rates but no provisions for averaging years.
What differences in individual or family circumstances should the social security program recognize?
To what extent could the purposes of the social security program be served by a law requiring individuals to purchase retirement insurance from a private firm?
Are there any theoretical reasons why social security might be expected to increase savings? Why might a tax on interest income lead to later retirements?
List the risks against which the social security program provides insurance. In which of these instances do you think providing insurance affects?
For as many market failures as you can, describe an alternative program to the present system and explain its advantages and disadvantages over the present one.
Assume that you wanted to reduce inequalities in income. How would this affect patterns of educational expenditure?
Consider welfare program with benefits that decrease as an individual's income increases. Draw the individual's budget constraint with and without the subsidy.
If individuals are risk averse, why do they care more about large losses-that is?? What does this imply for the design of social insurance?
Calculate his total marginal tax rate. If he lives in California and faces an 11 percent state income tax, what is his marginal tax rate?
It has sometimes been suggested that the government should restrict the use of food stamps to healthy foods. Discuss the merits of this proposal.
Draw the individual's budget constraint with and without the subsidy (put labor on one axis, consumption on the other).
There have been proposals for more extensive use of government subsidies to help poor. Discuss the merits of private versus public provision of housing.
The government's paying a fixed dollar amount of housing allowance. Discuss the consequences for the family's expenditures on medicine; on food.
How would this affect the kind of welfare programs you might support or how you might design your welfare programs?
Why might you be more concerned with the reduced work effort of upper-income individuals compared to the increased work effort of lower-income individuals'.
What happens to employment and wages of unskilled workers? What happens to the unemployment rate?
Discuss the equity and efficiency arguments for providing college loans at subsidized interest rates.
List some characteristics of our educational institutions or outcome of our educational system that seem to be more consistent with screening view of education.
Why might you still expect expenditure per pupil to be lower in industrial centers than in the suburbs?
Discuss the trade-offs involved in deciding upon the appropriate level and form of decentralization/centralization within education.