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Unformatted text preview: -Transfer payments: income payments for which no goods or services are received (social security, welfare, unemployment); they attempt to correct for inequity-Taxation: main function is transfer command over resources (buying power) from the private sector to the public sector-Taxes can be:-Progressive--pay a larger % as you earn more $$$ (federal income tax system)-Proportional--pay same % all the way (state sales tax; social security up to the ceiling)-Regressive--pay a lower % as you earn more $$$ (social security tax beyond the ceiling)-Figure 4.6 in text--sources of federal tax revenue-largest source = individual/personal income tax (45%)-second largest = social security tax (37%)-State and Local Revenues—(T-23):-local/cities depend heavily on property taxes-states depend heavily on sales taxes-Cost-Benefit Analysis: projects are only desirable if the benefits exceed the opportunity costs (T-Renton police)...
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- Spring '11
- person excludes consumption