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Exam 12: The Design of the Tax System

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Question 181

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Which of the following tax systems could not be structured to satisfy conditions of vertical equity?

A) a proportional tax
B) a regressive tax
C) a progressive tax
D) a lump-sum tax

E) All of the above
F) C) and D)

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Question 182

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Table 12-18 United States Income Tax Rates for a Single Individual, 2009 and 2010. -Refer to Table 12-18. What type of tax structure does the United States have in 2010 for single individuals?

A) a proportional tax structure
B) a regressive tax structure
C) a progressive tax structure
D) a lump-sum tax structure

E) A) and B)
F) None of the above

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Question 183

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Suppose that Christine values a baseball hat at $20, and Mark values one at $18. The pretax price of a baseball hat is $14. The government imposes a $5 tax on baseball hats, which raises the price to $19. What is the deadweight loss from the tax?

Table 12-1 -Refer to Table 12-1. Assume that the price of a weekend ski pass is $45 and that the price reflects the actual unit cost of providing a weekend of skiing. Suppose the government imposes a tax of $12 on skiing, which raises the price of a weekend ski pass to $57. How much tax revenue is collected from these four skiers?

Table 12-22 -Refer to Table 12-22. A regressive tax is illustrated by tax

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

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 2012?

The benefits principle of taxation can be used to argue that wealthy citizens should pay higher taxes than poorer ones on the basis that

A tax system with little deadweight loss and a small administrative burden would be described as

What are the two main sources of tax revenues for state and local governments?

Under a progressive tax system, the marginal tax rate could be equal to the average tax rate only when a taxpayer

The administrative burden of any tax system is part of the inefficiency it creates.

In the absence of taxes, Carlos would prefer to purchase a large fishing boat with a 75 hp motor. The government has recently decided to place a tax on boats with 75 hp motors or higher. If Carlos decides to purchase a smaller boat with a 50 hp motor as a result of the tax, which of the following statements is correct?

​Rob's income rises from $50,000 to $60,000 and his income tax increases from $6,000 to $7,500.His marginal tax rate is 12.5%.

A budget surplus occurs when government receipts fall short of government spending.

Table 12-25 -Refer to Table 12-25. Which plan illustrates a regressive tax?

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 taxes based on the benefits principle?

The average tax rate measures the

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 schedule could be considered a lump-sum tax?

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?