Question

ANSWER 5 OF THE 10 QUESTIONS PLEASE. PRINT--WRITTING PLEASE. NO Handwriting. IF YOU CANNOT answer 5 questions，DO NOT post your answers. MUCH APPRECIATED!

ESSAY QUESTIONS: Please answer five (5) of the following ten (10) questions: the section x influence (1)The sales tax treatment of Internet or mail-order purchases is quite controversial, as discussed in the Sert Think about the products you have purchased using the Internet or by mail order in the recent past and roll how much you spent. Does your state have a use tax? How much did the opportunity to avoid sales tax influen vour decision to purchase over the Internet or by mail orderr Do you think that companies that sell through the Internet or by mail order should be required to collect state sales or use taxes on purchases? If not, then what other methods might states use to collect these taxes? (2) Please discuss at least three of the four potential roles for intergovernmental grants in our fiscal system. Your answer should include examples for each of the roles you are describing. (3) Financing government services through user fees generally leads to a debate/comparison of fees v. taxes. Please describe and define a fee and a tax, identifying the significant differences between the two. Your answer should provide examples of each to support your analysis. (4) "Sales taxes are fairer than income taxes because sales taxes cannot be avoided by the rich." Discuss & evaluate this idea, using tax policy concepts to provide support for your evaluation. Is it possible to design a sales tax that is more progressive than a personal income tax? (6) The two most important state taxes are income and general sales taxes, although states also make substantial use of excise taxes, direct business taxes (usually a corporate income tax), and others. List and discuss factors that might influence a state in choosing between an income and general sales tax. What can these differences tell us about both a State's policy priorities and economies?

Answer 1

1)Use tax is defined as tax imposed on purchases made outside a person's place where he resides.45 states in US have use tax.

The decision to do online shopping arises because if a business has no physical presence ,a person need not pay sales tax and so the price goes down .

If the company has a physical presence in a state then the business should collect sales tax from online customers.If there is no physical presence it is not required to collect sales tax on online services.

In order to collect sales tax a business should have a location in the state, which may be a office, ware house ,store etc.

2)Intergovernmental grants are made from one government to the other like federal to state or from city to school district.The 3 roles are financing sub national services,to improve the efficiency of subsidized services,redistribution of resources to equalize the capacity of tax.Egs are grant released for development of community,grant given for education,equalize when there is a difference between public services received tax imposed.  

3)Tax is a compulsory payment levied by the government on its citizens while a fee is a voluntary payment made to the government for special services given to the citizens . EG of tax is income tax and EG of fee is entry fee of a park.

5)Fairness here means distributional equity.Income tax is direct tax while sales tax is indirect tax.Income tax is progressive but sales tax is not.People can evade income tax but no one can evade sales tax .Both the rich and the poor will have to pay sales tax.So sales tax is fairer than income tax.If sales tax is made progressive also like income tax with the rich paying more as their spending is more ,it will be fairer than income tax.

It is possible to replace a income tax with progressive consumption tax or sales tax .This can be done by a personal expenditure tax .This makes it necessary for tax payers to file tax returns on their spending by first subtracting savings from income.If spending goes up above an exemption amount it will be taxed at graduated rate and people with higher spending will be taxed at higher rate.

6) States choose from a variety of tax instruments while making their tax structure.These include general sales, personal income, selective sales,corporate income, license property and severance taxes.These tax instruments respond in a different way to ups and downs in the economy.The state will choose a tax which is stable like the sales tax on food.Sales tax on food is stable because people will buy food both in good and bad times.But tax revenues collected from capital gains is volatile as they depend on the performance of stock market .

The policy priorities of the state are that while choosing their tax structure, the state will choose tax which is stable and will bring stable revenue.It will not choose the tax structure which is volatile as revenue collected from capital gains changes depending on the stock market.