Be it enacted by the Legislature of the State of Kansas:

Section 1.  No person shall be allowed to run for public office in the state of Kansas who
a.   cannot show that he or she has passed a high-school-level class in economics; or
b.   cannot pass the test shown in Section 2 below.

 

Section 2.  Test for Economic Proficiency

 

Q.1 In an effort to raise tax revenue, a legislature has doubled the sales tax on a certain product. What is the most likely outcome of this measure?
a.   Tax revenues from this item will more than double since people like luxury items, and increased price is seen as an indication of luxury.
b.   Tax revenues on this item will double.
c.   Tax revenues on this item will rise only slightly because many consumers will no longer buy the product.
d.   Tax revenues from this item will rise slightly. Businesses making and selling this product will see their sales drop because many consumers will no longer buy the item. There is a possibility that some employees from these businesses will be laid off, and the increased tax revenue will need to be spent on additional social services.

 

Q.2  The Franchise Tax, a tax imposed on businesses for the privilege of doing business (Choose as many as apply.)
a.   Provides additional revenue for social services.
b.   Discourages some small businesses, businesses which would have provided jobs to those now receiving social services, from even opening their doors in the first place.
c.   Is among the highest in the nation in Kansas.
d.   Can make the difference between whether a small and marginally successful business can continue to operate.

 

Q3.  Having a lot of people working for the government
a.   Is a good idea because there are more people working.
b.   Is a good idea because providing jobs is a legitimate function of government.
c.   Sucks wealth out of the economy because the only way to pay for more government employees is to raise taxes.

 

Q.4  True or false? The longer a person stays in Congress, the more government spending he or she votes for.

 

Q.5  A city government wants to hand tax money to a private developer to come into the community and build things.
a.   This is a good idea economically because it provides jobs.
b.   This is a good idea socially because it makes things prettier.
c.   There is no way to know whether this is a good economic idea because the money being handed to the developer is not creating additional wealth. Instead, the money was taken away from local citizens, and there is no way to determine what additional wealth would have been created in the community by the people who owned that money in the first place.

 

Q.6  If a small business employs 10 full-time minimum-wage workers, and the minimum wage is raised by 50 cents an hour, how much additional yearly expense will the small business incur?
a.   About $100
b.   About $1000
c.   About $10,000
d.   None, because the business owner will lay off several people.
e.   About $10,000, but that’s okay because the business can raise the price of its products to compensate, an increase that will likely be paid by consumers who are earning minimum wage.
f.   About $10,000, but that’s okay because the politicians can correctly claim they didn’t raise taxes.

~~~~~

If you’re a small business owner, you already know the correct answers to these questions. If you don’t know what the correct answers are, I suggest you go talk with a small-business owner and find out.

KsSmallBiz.com, January 7, 2007

Posted by Sharon under Libertarianism | 2 Comments »