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Exam 12: The Design of the Tax System

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Question 41

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Table 12-12 United States Income Tax Rates for a Single Individual,2002 and 2003. -Refer to Table 12-12.Charles is a single person whose taxable income is $35,000 a year.What is his average tax rate in 2003?

A) 16.4%
B) 19.6%
C) 21.3%
D) 27%

E) C) and D)
F) B) and D)

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Question 42

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Social Security is an income support program,designed primarily to maintain the living standards of the poor.

A) True
B) False

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Question 43

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Corporate profits distributed as dividends are

Economist Alan Greenspan discussed the advantages of which kind of tax system,"particularly if one were designing a tax system from scratch"?

The U.S.income tax

High marginal income tax rates

Approximately what percentage of the U.S.federal government's receipts come from individual income taxes?

Suppose that the government taxes income in the following fashion: 20 percent of the first $50,000,40 percent of the next $50,000,and 60 percent of all income over $100,000.John earns $200,000,and Theresa earns $600,000.Which of the following statements is correct?

You are trying to design a tax system that will simultaneously achieve both of the following goals: 1) two people with the same total income would pay taxes of the same amount,and 2) a high-income person would pay a higher fraction of income in taxes than a low-income person.Which of the following tax systems could achieve both goals?

Table 12-14 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 12-14.Which tax schedules are proportional?

One characteristic of an efficient tax system is that it minimizes the costs associated with revenue collection.

Antipoverty programs funded by taxes on the wealthy are sometimes advocated on the basis of the benefits principle.

An efficient tax system is one that imposes small deadweight losses and small administrative burdens.

Table 12-9 The table below shows the marginal tax rates for an unmarried taxpayer for various levels of taxable income. -Refer to Table 12-9.For this tax schedule,what is the marginal tax rate for an individual with taxable income of $49,000?

When taxes are imposed on a commodity,

The deadweight loss of a tax is

Table 12-12 United States Income Tax Rates for a Single Individual,2002 and 2003. -Refer to Table 12-12.Charles is a single person whose taxable income is $35,000 a year.What is his marginal tax rate in 2002?

The U.S.federal government collects about one-half of the taxes in our economy.

Table 12-16 United States Income Tax Rates for a Single Individual,2002 and 2003. -Refer to Table 12-16.What type of tax structure did the United States have in 2002 for single individuals?

In 2007,the average American paid approximately how much to the federal government in taxes?