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

question 244

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% 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:

Charitable Contributions

Donations made to qualified organizations, which can often be deducted from taxable income.

Taxable Income

The portion of one's income that is subject to taxes by federal, state, and/or local governments, calculated after deductions and exemptions.

Carryforward

A tax provision allowing current losses or credits to be used in future tax years to offset potential gains or income.

Net Income

The amount of earnings left after all expenses, taxes, and costs have been subtracted from total revenue.