Question 1

List several examples of the administrative burden of the U.S. income tax system.

Accepted Answer

time spent filling out tax for...

Question 2

Many economists believe that

Accepted Answer

A)  the corporate income tax satisfies the goal of horizontal equity.
B)  the corporate income tax does not distort the incentives of customers.
C)  the corporate income tax is more efficient than the personal income tax.
D)  workers and customers bear much of the burden of the corporate income tax.E) C) and D)
F) A) and C)

Question 3

Which of the following statements is not correct?

Accepted Answer

A)  A gasoline tax can be an example of a tax that uses the benefits principle.
B)  A progressive tax attempts to achieve vertical equity.
C)  A progressive tax can be an example of the ability-to-pay principle.
D)  A regressive tax attempts to achieve vertical equity.E) A) and B)
F) A) and C)

Question 4

A consumption tax is a tax on

Accepted Answer

A)  goods but not on services.
B)  the amount of income that people spend.
C)  the amount of income that people earn.
D)  the amount of income that people save.E) None of the above
F) A) and D)

Question 5

When the total surplus lost as a result of a tax is less than the amount of tax revenue collected by the government there is a deadweight loss.

Accepted Answer

A) True 
 B)False

Question 6

In 1789 the percentage of the average American's income that went to pay taxes was about

Accepted Answer

A)  5%. Today it is about 50%.
B)  5%. Today it is about 25%.
C)  50%. Today it is about 33%.
D)  25%. Today it is about 33%.E) C) and D)
F) All of the above

Question 7

When a tax is justified on the basis that the taxpayers who pay the tax receive specific government services from payment of the tax, the tax

Accepted Answer

A)  is considered horizontally equitable.
B)  burden is minimized.
C)  satisfies the benefits principle.
D)  is considered vertically equitable.E) All of the above
F) B) and C)

Question 8

One tax system is less efficient than another if it

Accepted Answer

A)  places a lower tax burden on lower-income families than on higher-income families.
B)  places a higher tax burden on lower-income families than on higher-income families.
C)  raises the same amount of revenue at a higher cost to taxpayers.
D)  raises less revenue at a lower cost to taxpayers.E) A) and B)
F) B) and C)

Question 9

Table 12-17
The following table shows the marginal tax rates for unmarried individuals for two years. 
-Refer to Table 12-17. Which of the following best describes the tax schedule in 2009?

Accepted Answer

A)  proportional tax
B)  progressive tax
C)  regressive tax
D)  vertical taxE) B) and D)
F) All of the above

Question 10

Table 12-14 
-Refer to Table 12-14. The tax system is

Accepted Answer

A)  progressive.
B)  regressive.
C)  proportional.
D)  lump sum.E) B) and C)
F) None of the above

Question 11

Bert faces a progressive tax structure that has the following marginal tax rates: 0 percent on the first $10,000, 10 percent on the next $10,000, 15 percent on the next $10,000, 25 percent on the next $10,000, and 50 percent on all additional income. If Bert earns $75,000, what is his average tax rate?

Accepted Answer

A)  20 percent
B)  25 percent
C)  30 percent
D)  36.67 percentE) None of the above
F) C) and D)

Question 12

The marginal tax rates on the richest Americans when Ronald Reagan was elected and when he left office were

Accepted Answer

A)  28 percent and 50 percent, respectively.
B)  70 percent and 40 percent, respectively.
C)  40 percent and 70 percent, respectively.
D)  50 percent and 28 percent, respectively.E) None of the above
F) A) and C)

Question 13

Vertical equity is not consistent with a regressive tax structure.

Accepted Answer

A) True 
 B)False

Question 14

Table 12-15 
-Refer to Table 12-15. The tax system is

Accepted Answer

A)  proportional.
B)  regressive.
C)  progressive.
D)  lump sum.E) B) and C)
F) All of the above

Question 15

​A city finances a performing arts center by adding a $2.75 tax to each ticket sold.This is an example of taxation via the benefits principle.

Accepted Answer

A) True 
 B)False

Question 16

Table 12-10 
-Refer to Table 12-10. If Si has $100,000 in taxable income, his tax liability will be

Accepted Answer

A)  $838.
B)  $3,844.
C)  $12,100.
D)  $21,709.E) B) and C)
F) All of the above

Question 17

'The U.S. tax code gives preferential treatment to investors in municipal bonds. This is an example of

Accepted Answer

A)  a tax loophole.
B)  tax evasion.
C)  an administrative burden.
D)  tax enforcement.E) None of the above
F) A) and D)

Question 18

Scenario 12-5
Senator Filch argues that a tax must be paid by people who benefit from government services. Senator Fudge argues that a tax must be paid in accordance with a person's ability to bear the tax burden. Senator Malfoy argues that people with a greater ability to pay a tax should pay a larger amount. Senator Moody argues that taxpayers with similar abilities to pay should contribute the same amount.
-Refer to Scenario 12-5. Which Senator is advocating for taxes based on horizontal equity?

Accepted Answer

A)  Senator Filch
B)  Senator Fudge
C)  Senator Malfoy
D)  Senator MoodyE) B) and D)
F) All of the above

Question 19

Table 12-20
The following table presents the total tax liability for an unmarried taxpayer under four different tax schedules for the income levels shown. 
-Refer to Table 12-20. Which tax schedules are proportional?

Accepted Answer

A)  Tax Schedule B only
B)  Tax Schedule B and Tax Schedule C
C)  Tax Schedule D only
D)  Tax Schedule A and Tax Schedule BE) C) and D)
F) B) and C)

Question 20

Suppose New York City passes a local "big gulp" tax that taxes carbonated beverages larger than 20 ounces if they contain sugar or high fructose corn syrup. If the revenue from the "big gulp" tax is earmarked for diabetes research, the "big gulp" tax may be justified

Accepted Answer

A)  on the basis of the ability-to-pay principle.
B)  because it is an example of a lump-sum tax and thus is the most efficient tax.
C)  on the basis of the benefits principle.
D)  because it is an example of a progressive tax and thus is the most equitable tax.E) All of the above
F) A) and B)

Exam 12: The Design of the Tax System

Correct Answer
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The marginal tax rates on the richest Americans when Ronald Reagan was elected and when he left office were

Correct Answer
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Suppose New York City passes a local "big gulp" tax that taxes carbonated beverages larger than 20 ounces if they contain sugar or high fructose corn syrup. If the revenue from the "big gulp" tax is earmarked for diabetes research, the "big gulp" tax may be justified

Correct Answer
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Table 12-10 -Refer to Table 12-10. If Si has $100,000 in taxable income, his tax liability will be

Correct Answer
verified

Correct Answer
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In 1789 the percentage of the average American's income that went to pay taxes was about

Correct Answer
verified

Vertical equity is not consistent with a regressive tax structure.

Correct Answer
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'The U.S. tax code gives preferential treatment to investors in municipal bonds. This is an example of

Correct Answer
verified

One tax system is less efficient than another if it

Correct Answer
verified

A city finances a performing arts center by adding a $2.75 tax to each ticket sold.This is an example of taxation via the benefits principle.

Correct Answer
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Table 12-17 The following table shows the marginal tax rates for unmarried individuals for two years. -Refer to Table 12-17. Which of the following best describes the tax schedule in 2009?

Correct Answer
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List several examples of the administrative burden of the U.S. income tax system.

Correct Answer
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time spent filling out tax for...
View Answer

Which of the following statements is not correct?

Correct Answer
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When the total surplus lost as a result of a tax is less than the amount of tax revenue collected by the government there is a deadweight loss.

Correct Answer
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Table 12-14 -Refer to Table 12-14. The tax system is

Correct Answer
verified

When a tax is justified on the basis that the taxpayers who pay the tax receive specific government services from payment of the tax, the tax

Correct Answer
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Table 12-20 The following table presents the total tax liability for an unmarried taxpayer under four different tax schedules for the income levels shown. -Refer to Table 12-20. Which tax schedules are proportional?

Correct Answer
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A consumption tax is a tax on

Correct Answer
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Many economists believe that

Correct Answer
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Table 12-15 -Refer to Table 12-15. The tax system is

Correct Answer
verified

Exam 12: The Design of the Tax System

Correct AnswerverifiedShow Answer

The marginal tax rates on the richest Americans when Ronald Reagan was elected and when he left office were

Correct AnswerverifiedShow Answer

Suppose New York City passes a local "big gulp" tax that taxes carbonated beverages larger than 20 ounces if they contain sugar or high fructose corn syrup. If the revenue from the "big gulp" tax is earmarked for diabetes research, the "big gulp" tax may be justified

Correct AnswerverifiedShow Answer

Table 12-10 -Refer to Table 12-10. If Si has $100,000 in taxable income, his tax liability will be

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In 1789 the percentage of the average American's income that went to pay taxes was about

Correct AnswerverifiedShow Answer

Vertical equity is not consistent with a regressive tax structure.

Correct AnswerverifiedShow Answer

'The U.S. tax code gives preferential treatment to investors in municipal bonds. This is an example of

Correct AnswerverifiedShow Answer

One tax system is less efficient than another if it

Correct AnswerverifiedShow Answer

​A city finances a performing arts center by adding a $2.75 tax to each ticket sold.This is an example of taxation via the benefits principle.

Correct AnswerverifiedShow Answer

Table 12-17 The following table shows the marginal tax rates for unmarried individuals for two years. -Refer to Table 12-17. Which of the following best describes the tax schedule in 2009?

Correct AnswerverifiedShow Answer

List several examples of the administrative burden of the U.S. income tax system.

Correct Answerverifiedtime spent filling out tax for...View AnswerShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

When the total surplus lost as a result of a tax is less than the amount of tax revenue collected by the government there is a deadweight loss.

Correct AnswerverifiedShow Answer

Table 12-14 -Refer to Table 12-14. The tax system is

Correct AnswerverifiedShow Answer

When a tax is justified on the basis that the taxpayers who pay the tax receive specific government services from payment of the tax, the tax

Correct AnswerverifiedShow Answer

Table 12-20 The following table presents the total tax liability for an unmarried taxpayer under four different tax schedules for the income levels shown. -Refer to Table 12-20. Which tax schedules are proportional?

Correct AnswerverifiedShow Answer

A consumption tax is a tax on

Correct AnswerverifiedShow Answer

Many economists believe that

Correct AnswerverifiedShow Answer

Table 12-15 -Refer to Table 12-15. The tax system is

Correct AnswerverifiedShow Answer

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A city finances a performing arts center by adding a $2.75 tax to each ticket sold.This is an example of taxation via the benefits principle.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
time spent filling out tax for...
View Answer

Correct Answer
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