The realities of US state government finances include the fact that:

(a) States pay for the majority of US infrastructure spending;

(b) Even though the US federal government pays for around one-half of its expenditures, Medicaid spending is the largest and fastest growing state expenditure;

(c) Retail sales taxes account for around 25-30% of the average states revenues;

(d) All of the above are true

Whether a given government faces a hard or a soft budget constraint depends upon:

(a) Whether it has exceeded its statutory debt limit, or not;

(b) The conditions of money and credit that it confronts;

(c) Whether it is in a budget deficit or surplus condition;

(d) It is able to meet its next scheduled bond payment.

Taxpayers have incentives to minimize their taxes through legal means, which can include:

(a) Forward- and backwards-shifting of the tax burden;

(b) Changing the timing as to when ordinary income is recognized for tax purposes;

(c) Vertical integration of business enterprises into larger units via mergers and acquisitions;

(d) All of the above are examples of legal means taken to avoid taxation.