Question 1

Table 12-17
The dollar amounts in the last three columns are the taxes owed under the three different tax systems.
 
-Refer to Table 12-17.Which of the three tax systems is proportional?

Accepted Answer

A)   Tax System A
B)   Tax System B
C)   Tax System C
D)   None of the systems are proportional.E) None of the above
F) All of the above

Question 2

The equity of a tax system concerns whether the tax burden is distributed equally among the population.

Accepted Answer

A) True 
 B)False

Question 3

A payroll tax is also referred to as a social insurance tax.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is an example of an excise tax?

Accepted Answer

A)   a tax on the wages that a firm pays its workers
B)   a tax on tobacco
C)   a tax on corporate profits
D)   the portion of federal income taxes earmarked to pay for Social Security and MedicareE) All of the above
F) B) and D)

Question 5

In general,Democrats tend to prefer

Accepted Answer

A)   higher marginal tax rates to promote vertical equity,while Republicans tend to prefer lower marginal tax rates to promote incentives to work and save.
B)   lower marginal tax rates to promote vertical equity,while Republicans tend to prefer higher marginal tax rates to promote incentives to work and save.
C)   higher marginal tax rates to promote incentives to work and save,while Republicans tend to prefer lower marginal tax rates to promote vertical equity.
D)   lower marginal tax rates to promote incentives to work and save,while Republicans tend to prefer higher marginal tax rates to promote vertical equity.E) A) and B)
F) All of the above

Question 6

The theory that the wealthy should contribute more to police protection than the poor because they have more to protect is based on

Accepted Answer

A)   the ability-to-pay principle.
B)   a consumption tax plan.
C)   the benefits principle.
D)   property tax assessments.E) All of the above
F) B) and C)

Question 7

Table 12-2
Consider the tax rates shown in the table below.
 
-Refer to Table 12-2.If Mateo has taxable income of $165,000,his marginal tax rate is

Accepted Answer

A)   16%.
B)   24%.
C)   34%.
D)   36%.E) C) and D)
F) A) and C)

Question 8

The U.S.federal government collects about

Accepted Answer

A)   one-third of the taxes in our economy.
B)   one-half of the taxes in our economy.
C)   two-thirds of the taxes in our economy.
D)   three-fourths of the taxes in our economy.E) A) and B)
F) All of the above

Question 9

According to the benefits principle,it is fair for people to pay taxes based on their ability to shoulder the tax burden.

Accepted Answer

A) True 
 B)False

Question 10

Which tax system requires all taxpayers to pay the same percentage of their income in taxes?

Accepted Answer

A)   a regressive tax
B)   a proportional tax
C)   a progressive tax
D)   a horizontal equity taxE) B) and C)
F) B) and D)

Question 11

Suppose that in 2012 the average citizen's federal tax bill is $14,888 per person,and total federal spending is $13,997 per person.In 2012,the federal government will have

Accepted Answer

A)   a per person budget surplus of $891.
B)   a per person budget deficit of $891.
C)   horizontal equity.
D)   vertical equity.E) A) and D)
F) A) and C)

Question 12

Table 12-2
Consider the tax rates shown in the table below.
 
-Refer to Table 12-2.If Livi has taxable income of $78,000,her average tax rate is

Accepted Answer

A)   18.7%.
B)   19.3%.
C)   20.1%.
D)   34.0%.E) A) and B)
F) B) and C)

Question 13

Table 12-12
United States Income Tax Rates for a Single Individual,2009 and 2010.
 
-Refer to Table 12-12.Kurt is a single person whose taxable income is $35,000 a year.What is his marginal tax rate in 2009?

Accepted Answer

A)   15%
B)   28%
C)   31%
D)   36%E) A) and C)
F) B) and C)

Question 14

The most efficient tax possible is a

Accepted Answer

A)   marginal income tax.
B)   lump-sum tax.
C)   consumption tax.
D)   corporate profit tax.E) A) and B)
F) B) and D)

Question 15

As the economy's income has grown,the government has

Accepted Answer

A)   grown at about the same pace.
B)   grown at a faster pace.
C)   grown at a slower pace.
D)   shrunk.E) A) and D)
F) B) and C)

Question 16

The United States federal government has a large budget deficit.Long-term projections suggest that under current law,taxes,as a percentage of GDP,will __________ and government spending,as a percentage of GDP,will __________.

Accepted Answer

remain con...

Question 17

If revenue from a gasoline tax is used to build and maintain public roads,the gasoline tax may be justified on the basis of

Accepted Answer

A)   the benefits principle.
B)   the ability-to-pay principle.
C)   vertical equity.
D)   horizontal equity.E) A) and C)
F) A) and B)

Question 18

What are the three categories of the costs of taxes to taxpayers?

Accepted Answer

the tax payment itse...

Question 19

Table 12-12
United States Income Tax Rates for a Single Individual,2009 and 2010.
 
-Refer to Table 12-12.Kurt is a single person whose taxable income is $35,000 a year.What is his average tax rate in 2009?

Accepted Answer

A)   17.6%
B)   20.5%
C)   21.3%
D)   26.2%E) None of the above
F) A) and D)

Question 20

Taxes can create deadweight losses because they

Accepted Answer

A)   allow the government to fund private goods.
B)   create administrative burdens as people comply with tax laws.
C)   allow the government to fund public goods.
D)   Both b and c are correct.E) A) and C)
F) A) and D)

Exam 12: The Design of the Tax System

What are the three categories of the costs of taxes to taxpayers?

Correct Answerverifiedthe tax payment itse...View AnswerShow Answer

In general,Democrats tend to prefer

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Table 12-17 The dollar amounts in the last three columns are the taxes owed under the three different tax systems. -Refer to Table 12-17.Which of the three tax systems is proportional?

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Suppose that in 2012 the average citizen's federal tax bill is $14,888 per person,and total federal spending is $13,997 per person.In 2012,the federal government will have

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As the economy's income has grown,the government has

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The equity of a tax system concerns whether the tax burden is distributed equally among the population.

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Table 12-2 Consider the tax rates shown in the table below. -Refer to Table 12-2.If Livi has taxable income of $78,000,her average tax rate is

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According to the benefits principle,it is fair for people to pay taxes based on their ability to shoulder the tax burden.

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Table 12-12 United States Income Tax Rates for a Single Individual,2009 and 2010. -Refer to Table 12-12.Kurt is a single person whose taxable income is $35,000 a year.What is his average tax rate in 2009?

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The most efficient tax possible is a

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Table 12-2 Consider the tax rates shown in the table below. -Refer to Table 12-2.If Mateo has taxable income of $165,000,his marginal tax rate is

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Which tax system requires all taxpayers to pay the same percentage of their income in taxes?

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If revenue from a gasoline tax is used to build and maintain public roads,the gasoline tax may be justified on the basis of

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The U.S.federal government collects about

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The theory that the wealthy should contribute more to police protection than the poor because they have more to protect is based on

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Table 12-12 United States Income Tax Rates for a Single Individual,2009 and 2010. -Refer to Table 12-12.Kurt is a single person whose taxable income is $35,000 a year.What is his marginal tax rate in 2009?

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A payroll tax is also referred to as a social insurance tax.

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The United States federal government has a large budget deficit.Long-term projections suggest that under current law,taxes,as a percentage of GDP,will __________ and government spending,as a percentage of GDP,will __________.

Correct Answerverifiedremain con...View AnswerShow Answer

Which of the following is an example of an excise tax?

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Taxes can create deadweight losses because they

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the tax payment itse...
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The United States federal government has a large budget deficit.Long-term projections suggest that under current law,taxes,as a percentage of GDP,will and government spending,as a percentage of GDP,will .

Correct Answer
verified
remain con...
View Answer

Correct Answer
verified

Correct Answer
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