Suppose Your City Has Had an Increase in Crime and the City

question 88

Multiple Choice

Suppose your city has had an increase in crime and the city government decides that more police are needed to patrol at night. Which of the following funding solutions avoids the free-rider problem involved with additional police officers?

• A) taxation of the city's top 50 percent of income earners
• B) donation-based police service
• C) voluntary police officers
• D) an increase in the city's sales tax

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Definitions:

Federal Government

The national government of a federated state, which holds the authority to govern at a level above individual states or provinces.

Personal Income Tax

A tax that governments impose on individuals based on their earnings or income.

Top Marginal

Refers to the highest tax rate applied to the last dollar of taxable income in a progressive tax system.

Federal Income Tax Rate

The percentage of an individual's or corporation's income that is paid to the federal government, which varies based on income level and filing status.