Term
| What are some of the things that started during the Progressive Era, and how do they fit with the modern and traditional views of the Constitutional powers of Congress? How do we get a movie about the Progressive views on money? |
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Definition
| Income tax (16th), direct Senate election (17th), Federal Reserve, antitrust, and broader regulation. Traditional view = enumerated powers only; Progressives favored broader implied powers. The Wizard of Oz is often seen as an allegory for gold vs. silver/monetary debate. |
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Term
| How did the Founding Fathers intend the federal government to be funded? How does the 16th amendment play in that and why was it necessary (or not)? |
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Definition
| Mainly tariffs, excises, and land sales (indirect taxes). The 16th Amendment allowed an unapportioned income tax, greatly expanding federal revenue and power beyond the original design. |
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Term
| What do we mean when we say a tax may be “shifted?” Do economists think most taxes can be shifted? How? Use sales taxes as an example, maybe. |
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Definition
| Shifting means the economic burden falls on someone other than the legal taxpayer. Most taxes can be shifted based on elasticities. Sales taxes are mostly shifted forward to consumers via higher prices. |
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Term
| What important and exciting things happened because of McCulloch v. Maryland? |
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Definition
| Upheld implied powers (Congress can create a national bank) and federal supremacy (states cannot tax federal instruments—“power to tax is power to destroy”). |
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Term
| What do we know about whether or not we can show that a tax on one group of people to do something that benefits another makes society better off? |
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Definition
| We generally cannot prove it makes society better off. It requires interpersonal utility comparisons and often creates inefficient transfers favoring organized interests. |
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Term
| What are some of the issues with having a “fair” personal and corporate income system? |
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Definition
| “Fair” is subjective. Problems include high compliance costs, distortions to work/investment, double taxation of corporate income, avoidance incentives, and the difficulty of achieving both horizontal and vertical equity. |
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Term
| Does the Constitution allow for fiat money? Use both the words of the Constitution and the legal tender cases at the Supreme Court to make your argument. |
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Definition
| Constitution gives power to coin money and regulate its value; states are limited to gold and silver coin as tender. Legal Tender Cases (1871, 1884) upheld paper money as legal tender, allowing fiat money despite the original text. |
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