Chapter 12 Reflection:

If you want to read more about government expenditures one source is the Economic Report of the President, available online here: http://www.whitehouse.gov/administration/eop/cea/economic-report-of-the-President/2014 (Links to an external site.)

Now that you have had a chance to think about tax systems which type do you prefer - progressive, flat tax, income, consumption - there are quite a few possibilities.  How do you think the concept of equity or fairness fits into a tax system? Last year Colorado voted on a progressive tax system - the initiative failed and we still have a flat income tax system here (4.63%).  After reading this chapter would you change your vote?

The type of tax system that I would prefer would be the progressive tax system. I firmly believe that one should be taxed on the amount of money that is earned. So, if you are a high wage earner, you will pay more taxes, etc. After reading this chapter, if Colorado had a vote on a progressive tax system, I would not change my vote but keep it for the progressive tax system.

 

Chapter 11 Reflection:

Think of an example of a Public Good (not a publicly provided good, but a Public Good using the definition from the chapter.)  What are the costs of providing the good?  What are the benefits? Is there another way to have the good provided? Did this chapter cause you to think of Public Goods differently?  In what way? 

Review the definition of a public good before answering this - not all publicly provided goods are public goods.

An example of a Public Good that comes to mind as well as reading about it in the book is our countries National Defense. This is one of our countries most important Public Good. We need to have the defense of our country from foreign aggressors and we need to be able to defend our country in case of an attack on our soil. The costs of this Public Good are in the billions but I feel that it is well worth it and every bit necessary. But the cost is nothing to all of us. The benefits are that we have the freedoms to live our lives as we see fit without the threat of war, etc. There is not another way to provide this good. We need to have our military forces, ready to go just in case they are called on needed to protect our country.

Chapter 10 Reflection:

What is your favorite example of a negative externality?  Could the problem be solved via negotiation (Coase Theorem)?  How or why not? Do you favor regulation to solve this externality?  Why or why not?  

My favorite example of a negative externality discussed in the book was the barking dogs. This is a normal existence to all our lives to hear barking dogs. The neighbors are disturbed by the noise of the barking dog but this problem can be solved with either the owner purchasing a bark collar for the dog, dog training classes or sessions or a civil conversation with the neighbors. But depending on the situation, the problem can also escalate to “please quiet your dog or I am going to file a noise complaint.” And this would not be keeping the neighbors happy.

As for regulation to solve this issue, some dogs bark and some do not. Some people get irate by barking dogs and some do not. The government does enforce a do not disturb the peace which barking dogs would fall under this category. I would favor the regulation if I lived in a neighborhood and I had an excessive barking dog right in my area that bothered our family life but not if I lived in the country and I had several of acres between me and another property. Right now we I have a dog that occasionally barks at the wildlife around our property but that goes with living in the country.