1) Explain what is progressive tax, a regressive tax, a proportional tax? Provide your comment on the progressivity or regressivity of each of the following taxes, signifying in each case your assumption related to the tax incidence:
a) The Federal personal income tax
b) A four percent state general sales tax
c) A Federal excise tax on the automobile tires
d) A municipal property tax on the real estate
e) The Federal corporate income tax
2) Explain the incidence of the excise tax when the demand is highly inelastic, elastic? What is the effect does elasticity of supply have upon the incidence of an excise tax? Explain the efficiency loss of the tax, and how does it is related to the elasticity of supply and demand?
3) Describe how affirmative and negative majority votes may sometimes result in the inefficient allocations of the resources to the public goods. Explain if this problem likely to be greater under the benefits received or an capability to pay the tax system?