Politics In American Local Government, Part I
A difficult quiz about finance and budget it local government.
Questions and Answers
- 1.
True or false? Most states require their municipalities to operate within a balanced budget.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Most states require their municipalities to operate within a balanced budget because it ensures financial stability and prevents excessive debt accumulation. A balanced budget means that the municipality's expenses do not exceed its revenue, promoting responsible financial management. This requirement helps maintain the overall economic health of the state and ensures that municipalities are not burdened with excessive financial obligations.Rate this question:
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- 2.
What is the oldest tax levied in the United States?
- A.
Property Tax
- B.
Sales Tax
- C.
Social Security Tax
- D.
Internet Sales Tax
Correct Answer
A. Property TaxExplanation
Property tax is the oldest tax levied in the United States. It has been in existence since colonial times and was initially used to fund local government services. Property tax is based on the assessed value of real estate and is typically levied by local governments to generate revenue for schools, infrastructure, and other public services. It is considered one of the most stable and reliable sources of revenue for local governments.Rate this question:
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- 3.
Approximately what percentage of the average American city's revenues comes from taxes? (property, sales, income, etc)
- A.
5%
- B.
45%
- C.
95%
- D.
120%
Correct Answer
B. 45%Explanation
The correct answer is 45%. This percentage suggests that a significant portion of the average American city's revenues is derived from taxes, including property, sales, and income taxes. This indicates that taxes play a crucial role in funding various public services and infrastructure in cities across the United States.Rate this question:
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- 4.
Which one of these is NOT a major source of revenue for cities?
- A.
Property taxes
- B.
Charges and user fees for services
- C.
Grants from state governments
- D.
Lottery revenue
Correct Answer
D. Lottery revenueExplanation
Lottery revenue is not a major source of revenue for cities. While property taxes, charges and user fees for services, and grants from state governments are all common sources of revenue for cities, lottery revenue is not typically a significant source of funding for city budgets. Cities may receive a small portion of lottery revenue, but it is not a primary source of funding for their operations.Rate this question:
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- 5.
Which of the following is NOT a major criticism of property taxes as a source of revenue?
- A.
It is difficult to evaluate and assess property values
- B.
The tax discourages property improvements and maintenance
- C.
The tax is slightly regressive because the poor spend a larger share of income on housing
- D.
Revenue from property taxes cannot be used toward education
Correct Answer
D. Revenue from property taxes cannot be used toward educationExplanation
The given answer states that revenue from property taxes cannot be used toward education. This is not a major criticism of property taxes as a source of revenue because property taxes can indeed be used to fund education in many jurisdictions. Therefore, the statement is incorrect.Rate this question:
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- 6.
True or false? Citizens tend to prefer sales taxes over property taxes because they are more equitable.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Citizens tend to prefer sales taxes over property taxes because they are more equitable. Sales taxes are considered more equitable because they are based on consumption and everyone pays them regardless of their income or property ownership. On the other hand, property taxes are based on the value of one's property and can be seen as more burdensome for those with higher-valued properties. Sales taxes distribute the tax burden more evenly among citizens, making them a more preferred option.Rate this question:
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- 7.
There are 3,500 local jurisdictions in the United States that levy a local income tax. 75% of them are located in which state?
- A.
Michigan
- B.
Pennsylvania
- C.
Texas
- D.
Hawaii
Correct Answer
B. PennsylvaniaExplanation
Pennsylvania is the correct answer because it has the highest number of local jurisdictions in the United States that levy a local income tax. Out of the 3,500 local jurisdictions, 75% of them are located in Pennsylvania. This indicates that Pennsylvania has a significant number of local governments that impose an income tax on its residents.Rate this question:
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- 8.
There are many advantages to imposing local income taxes instead of property taxes. Which one is NOT an advantage?
- A.
It is less regressive
- B.
It responds well to changing economic conditions
- C.
Collecting the tax is cheaper and more efficient
- D.
It attracts more businesses to the city
Correct Answer
D. It attracts more businesses to the cityExplanation
Businesses will develop in nearby jurisdictions that do not assess such a tax.Rate this question:
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- 9.
There are some cities, like Oakland, CA, that are hostile environments for collecting taxes, Which of the following is a strategy that has been proven to be successful for raising revenues in these environments?
- A.
Concentrate the tax on one thing like property taxes
- B.
Spread the tax base by using many small taxes instead of a few large ones
- C.
Focus the taxes on the citizens that will pay them and ignore those who won't
- D.
Pick the largest employer in the city and tax the crap out of them
Correct Answer
B. Spread the tax base by using many small taxes instead of a few large onesExplanation
In hostile tax environments like Oakland, CA, spreading the tax base by using many small taxes instead of a few large ones has been proven to be successful for raising revenues. By implementing multiple small taxes, the burden is distributed across a wider range of taxpayers, making it more difficult for individuals or entities to avoid or evade taxes. This strategy helps to ensure a more equitable distribution of the tax burden and reduces the risk of relying heavily on a single source of revenue.Rate this question:
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- 10.
Which expenditure accounts for the highest percentage of municipal spending?
- A.
Public safety
- B.
Transportation
- C.
Interest on debt
- D.
Parks and recreation
Correct Answer
A. Public safetyExplanation
Public safety accounts for the highest percentage of municipal spending because it includes expenses related to police and fire departments, emergency services, and maintaining law and order in the community. These services are essential for the safety and well-being of the residents, making it a top priority for municipal governments. Transportation, interest on debt, and parks and recreation are also important areas of expenditure, but they typically do not require as significant a portion of the budget as public safety.Rate this question:
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Current Version
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Mar 20, 2023Quiz Edited by
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Mar 31, 2014Quiz Created by
Mrm415
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