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the trading of votes to secure desired outcomes

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Collective action problem. The term "collective action problem" describes the situation in which multiple individuals would all benefit from a certain action, but has an associated cost making it implausible that any individual can or will undertake and solve it alone.

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n political science and economics, (also known as agency dilemma or the agency problem) occurs when one person or entity (the "agent") is able to make decisions on behalf of, or that impact, another person or entity: the "principal".

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the economic analysis of government decision-making, politics, and elections

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Government failure is a situation where government intervention in the economy to correct a market failure creates inefficiency and leads to a miss allocation of scarce resources.

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The median voter theorem states that "a majority rule voting system will select the outcome most preferred by the median voter". The median voter theorem rests on two main assumptions, with several others

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this problem arises when information known by the first party to a contract or agreement is not known by the second party, and as a result, the second party incurs major costs

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he act of voting involves a benefit and a cost to the voter. A benefit is derived if the voter changes the outcome of the election to the one that is desired (in such a case, the voter is said to be pivotal). ... A rational voter should therefore not vote. The paradox is that electoral turnout is relatively high.

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the tendency of one party to a contract or agreement to alter her or his behavior

Ex. drivers may be less careful when they are driving because the car has insurance

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unequal knowledge possessed by the parties to a market transaction

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A tax is progressive if its average rate increases as income increases. Such a tax claims not only a larger absolute dollar amount but also a larger percentage of income as income increases.

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The tax burden should be apportioned according to taxpayers income and wealth.

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This loss is society sacrifice of net benefit, because the tax reduces production and consumption of the product below their levels of economic efficiency, where marginal benefit and marginal cost are equal.

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-on commodities/ purchases
-Sales: cover wide range of products, calculated as a percentage of the price paid for the product
-Excises: levied individually on small, select list of commodities, levied on a per-init basis

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- levied on corporation's profit
-for almost all corporations, tax rate: 35 percent

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-taxes on wages and salaries
-for financing Social Security and Medicare
-employer and employees pay these taxes equally

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The rate paid on the last dollar earned, calculated by taking the ratio of the change in the change in income

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The benefits-received principle of taxation asserts that households should purchase the goods and services of government in the same way the buy other commodities.
Those who benefit more from the government should pay for the taxes necessary to finance them.

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tax on income earned (wages, tips, earnings on savings); progressive; direct; based on ability to pay principle

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A tax is proportional if its average rate remains the same regardless of the size of the income. These taxes are often referred to as "flat taxes"

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Cash payments made by the government to people who do not supply goods, services, or labor in exchange for these payments. They include Social Security benefits, veterans' benefits, and welfare payments.

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-the total tax paid divided by total taxable income

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The division of a tax burden between buyers and sellers

Tax Incidence w/ Elastic Demand

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The money that a government spends procuring goods or services from the private sector. Examples include a local government hiring a company to repair a road or the national government buying artillery for the military.

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A certain percentage of taxes on household where the local government obtain the most income from taxes.

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A tax is regressive if its average rate declines as income increases. Such a tax takes a smaller proportion of income as income increases.