6. LO.3 Using Adam Smith’s canon on economy, evaluate the Federal income tax.
7. LO.3 Distinguish between taxes that are proportional and those that are progressive.
8. LO.4 Several years ago Ethan purchased the former parsonage of St. James Church to use as a personal residence. To date, Ethan has not received any ad valorem property tax bills from either the city or the county tax authorities.
a. What is a reasonable explanation for this oversight?
b. What should Ethan do?
9. LO.4 The Adams Independent School District wants to sell a parcel of unimproved land that it does not need. Its three best offers are as follows: from the state’s Department of Public Safety (DPS), $2.3 million; from the Second Baptist Church, $2.2 million; and from Baker Motors, $2.1 million. DPS would use the property for a new state highway patrol barracks, Second Baptist would start a church school, and Baker would open a car dealership. If you are the financial adviser for the school district, which offer would you prefer? Why?
10. LO.4 The commissioners for Walker County are actively negotiating with Falcon Industries regarding the location of a new manufacturing plant in the area. As Falcon is considering several other sites, a “generous tax holiday” may be needed to influence the final choice. The local school district is opposed to any “generous tax holiday.”
a. What would probably be involved in a generous tax holiday?
b. Why would the school district be opposed?