Question 1

Which of the following in not a reason that a lump-sum tax imposes a minimal administrative burden on taxpayers?

Accepted Answer

A)  Everyone can easily compute the amount of tax owed.
B)  There is no benefit to hiring an accountant to do your taxes.
C)  Everyone owes the same amount of tax, regardless of earnings.
D)  The government can easily forecast tax revenues.E) A) and B)
F) All of the above

Question 2

Table 12-16 
-Refer to Table 12-16. In this tax system which of the following is possible?

Accepted Answer

A)  vertical and horizontal equity
B)  vertical but not horizontal equity
C)  horizontal but not vertical equity
D)  neither horizontal nor vertical equityE) A) and C)
F) B) and C) A

Question 3

Economists play an important role in the complex debates over tax policy by

Accepted Answer

A)  identifying efficiency as the most important goal of tax policy.
B)  identifying equity as the most important goal of tax policy.
C)  shedding light on the tradeoff between efficiency and equity in tax policy.
D)  None of the above is correct.E) C) and D)
F) All of the above

Question 4

Briefly describe the tradeoff between equity and efficiency of tax systems using a few examples.

Accepted Answer

Although most Americans agree that equit...

Question 5

The idea that people in equal conditions should pay equal taxes is referred to as

Accepted Answer

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

Question 6

Some colleges charge all students the same "activity fee." Suppose that students differ by how many campus activities they engage in. This charge is most like

Accepted Answer

A)  an excise tax which conforms to the benefits principle.
B)  an excise tax which violates the benefits principle.
C)  a lump-sum tax which conforms to the benefits principle.
D)  a lump-sum tax which violates the benefits principle.E) A) and B)
F) A) and C)

Question 7

Table 12-9
United States Income Tax Rates for a Single Individual, 2012 and 2013. 
-Refer to Table 12-9. Harry is a single person whose taxable income is $35,000 a year. What is his marginal tax rate in 2013?

Accepted Answer

A)  10%
B)  15%
C)  27%
D)  30%E) All of the above
F) None of the above

Question 8

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) None of the above
F) A) and C)

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Sue earns income of $80,000 per year. Her average tax rate is 50 percent. Sue paid $5,000 in taxes on the first $30,000 she earned. What was the marginal tax rate on the first $30,000 she earned, and what was the marginal tax rate on the remaining $50,000?

Accepted Answer

A)  6.25 percent and 50.00 percent, respectively
B)  10.00 percent and 70.00 percent, respectively
C)  16.67 percent and 60.00 percent, respectively
D)  16.67 percent and 70.00 percent, respectivelyE) A) and D)
F) B) and C)

Question 11

A mortgage interest deduction would be considered

Accepted Answer

A)  tax evasion.
B)  a subsidy to the poor.
C)  a deduction that benefits all members of society equally.
D)  a tax loophole.E) A) and D)
F) None of the above

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

​Assume a small town decides to build a park by imposing a $2,000 lump-sum tax on each household. If a household's income rises from $50,000 to $75,000, its marginal tax rate is:

Accepted Answer

A)  ​0%
B)  ​2.67%
C)  ​4%
D)  ​8%E) B) and D)
F) B) and C)

Question 14

The claim that all citizens should make an "equal sacrifice" to support government programs is usually associated with

Accepted Answer

A)  the ability-to-pay principle.
B)  the benefits principle.
C)  efficiency arguments.
D)  regressive tax arguments.E) B) and C)
F) B) and D)

Question 15

Some colleges charge all students the same fee for access to campus computing services. Suppose that students differ by how many hours of campus computing services they use. For example, some students print all their papers and assignment in the campus computer labs, while others use their own printers in their apartments. The computing services fee is most like a(n)

Accepted Answer

A)  excise tax that conforms to the benefits principle.
B)  excise tax that violates the benefits principle.
C)  lump-sum tax that conforms to the benefits principle.
D)  lump-sum tax that violates the benefits principle.E) A) and B)
F) A) and C)

Question 16

What has been the relationship over the past century between the U.S. economy's income and the percentage of that income that the government collects in revenues?

Accepted Answer

Both have increased over time, but the p...

Question 17

Define the average tax rate.

Accepted Answer

The average tax rate...

Question 18

According to the benefits principle, it is fair for people to pay taxes based on the benefits they receive from the government.

Accepted Answer

A) True 
 B)False  True

Question 19

An efficient tax system is one that imposes small

Accepted Answer

A)  deadweight losses and administrative burdens.
B)  marginal rates and deadweight losses.
C)  administrative burdens and transfers of money.
D)  marginal rates and transfers of money.E) A) and B)
F) B) and D) A

Question 20

Country A's tax system is more efficient than Country B's tax system if

Accepted Answer

A)  Country A collects less tax revenue than Country B, and the cost to taxpayers is the same in both countries.
B)  Country A collects more tax revenue than Country B, even though the cost to taxpayers is greater in Country A than in Country B.
C)  the same amount of revenue is raised in both countries, but the cost to taxpayers is smaller in Country A than in Country B.
D)  the same amount of revenue is raised in both countries, but the taxes are collected in a shorter amount of time in Country A than in Country B.E) None of the above
F) A) and C)

Exam 12: The Design of the Tax System

Which of the following in not a reason that a lump-sum tax imposes a minimal administrative burden on taxpayers?

Correct Answer
verified

Table 12-16 -Refer to Table 12-16. In this tax system which of the following is possible?

Correct Answer
verified
A

Economists play an important role in the complex debates over tax policy by

Correct Answer
verified

Briefly describe the tradeoff between equity and efficiency of tax systems using a few examples.

Correct Answer
verified
Although most Americans agree that equit...
View Answer

The idea that people in equal conditions should pay equal taxes is referred to as

Correct Answer
verified

Some colleges charge all students the same "activity fee." Suppose that students differ by how many campus activities they engage in. This charge is most like

Correct Answer
verified

Table 12-9 United States Income Tax Rates for a Single Individual, 2012 and 2013. -Refer to Table 12-9. Harry is a single person whose taxable income is $35,000 a year. What is his marginal tax rate in 2013?

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Sue earns income of $80,000 per year. Her average tax rate is 50 percent. Sue paid $5,000 in taxes on the first $30,000 she earned. What was the marginal tax rate on the first $30,000 she earned, and what was the marginal tax rate on the remaining $50,000?

Correct Answer
verified

A mortgage interest deduction would be considered

Correct Answer
verified

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

Correct Answer
verified

Assume a small town decides to build a park by imposing a $2,000 lump-sum tax on each household. If a household's income rises from $50,000 to $75,000, its marginal tax rate is:

Correct Answer
verified

The claim that all citizens should make an "equal sacrifice" to support government programs is usually associated with

Correct Answer
verified

Correct Answer
verified

What has been the relationship over the past century between the U.S. economy's income and the percentage of that income that the government collects in revenues?

Correct Answer
verified
Both have increased over time, but the p...
View Answer

Define the average tax rate.

Correct Answer
verified
The average tax rate...
View Answer

According to the benefits principle, it is fair for people to pay taxes based on the benefits they receive from the government.

Correct Answer
verified
True

An efficient tax system is one that imposes small

Correct Answer
verified
A

Country A's tax system is more efficient than Country B's tax system if

Correct Answer
verified

Exam 12: The Design of the Tax System

Which of the following in not a reason that a lump-sum tax imposes a minimal administrative burden on taxpayers?

Correct AnswerverifiedShow Answer

Table 12-16 -Refer to Table 12-16. In this tax system which of the following is possible?

Correct AnswerverifiedA

Economists play an important role in the complex debates over tax policy by

Correct AnswerverifiedShow Answer

Briefly describe the tradeoff between equity and efficiency of tax systems using a few examples.

Correct AnswerverifiedAlthough most Americans agree that equit...View AnswerShow Answer

The idea that people in equal conditions should pay equal taxes is referred to as

Correct AnswerverifiedShow Answer

Some colleges charge all students the same "activity fee." Suppose that students differ by how many campus activities they engage in. This charge is most like

Correct AnswerverifiedShow Answer

Table 12-9 United States Income Tax Rates for a Single Individual, 2012 and 2013. -Refer to Table 12-9. Harry is a single person whose taxable income is $35,000 a year. What is his marginal tax rate in 2013?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Sue earns income of $80,000 per year. Her average tax rate is 50 percent. Sue paid $5,000 in taxes on the first $30,000 she earned. What was the marginal tax rate on the first $30,000 she earned, and what was the marginal tax rate on the remaining $50,000?

Correct AnswerverifiedShow Answer

A mortgage interest deduction would be considered

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

​Assume a small town decides to build a park by imposing a $2,000 lump-sum tax on each household. If a household's income rises from $50,000 to $75,000, its marginal tax rate is:

Correct AnswerverifiedShow Answer

The claim that all citizens should make an "equal sacrifice" to support government programs is usually associated with

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What has been the relationship over the past century between the U.S. economy's income and the percentage of that income that the government collects in revenues?

Correct AnswerverifiedBoth have increased over time, but the p...View AnswerShow Answer

Define the average tax rate.

Correct AnswerverifiedThe average tax rate...View AnswerShow Answer

According to the benefits principle, it is fair for people to pay taxes based on the benefits they receive from the government.

Correct AnswerverifiedTrue

An efficient tax system is one that imposes small

Correct AnswerverifiedA

Country A's tax system is more efficient than Country B's tax system if

Correct AnswerverifiedShow Answer

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Correct Answer
verified
A

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Correct Answer
verified
Although most Americans agree that equit...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Assume a small town decides to build a park by imposing a $2,000 lump-sum tax on each household. If a household's income rises from $50,000 to $75,000, its marginal tax rate is:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Both have increased over time, but the p...
View Answer

Correct Answer
verified
The average tax rate...
View Answer

Correct Answer
verified
True

Correct Answer
verified
A

Correct Answer
verified