Question 1

In practice, the U.S. income tax system is filled with special provisions that alter a family's tax based on its specific circumstances.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following tax systems is the most fair?

Accepted Answer

A)  proportional taxes
B)  regressive taxes
C)  progressive taxes
D)  There is no objective way to assess fairness among the three systems.E) A) and B)
F) C) and D)

Question 3

Define the deadweight loss of a tax.

Accepted Answer

The deadweight loss of a tax i...

Question 4

Table 12-23
The dollar amounts in the last three columns are the taxes owed under the three different tax systems. 
-Refer to Table 12-23. Which of the three tax systems is regressive?

Accepted Answer

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

Question 5

If revenue from a cigarette tax is used to pay for healthcare for people with lung cancer, the cigarette 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) All of the above
F) A) and C)

Question 6

Table 12-21
The dollar amounts in the last three columns are the taxes owed under the three different tax systems. 
-Refer to Table 12-21. Which of the three tax systems is progressive?

Accepted Answer

A)  Tax System A
B)  Tax System B
C)  Tax System C
D)  All of the tax systems are progressive.E) B) and D)
F) B) and C)

Question 7

​Sonja paid $15,000 in taxes after having earned $100,000. Amanda paid $22,000 in taxes after having earned an income of $146,667.This is an example of a proportional tax.

Accepted Answer

A) True 
 B)False

Question 8

Scenario 12-3
Suppose Roger and Regina receive great satisfaction from their consumption of cheesecake. Regina would be willing to purchase only one slice and would pay up to $8 for it. Roger would be willing to pay $11 for his first slice, $9 for his second slice, and $5 for his third slice. The current market price is $5 per slice.
-Refer to Scenario 12-3. Assume that the government places a $4 tax on each slice of cheesecake and that the new equilibrium price is $9. How much tax revenue will be generated from sales to Regina and Roger?

Accepted Answer

A)  zero
B)  $4
C)  $8
D)  $12E) C) and D)
F) A) and C)

Question 9

In 2009, the top 1 percent of income earners

Accepted Answer

A)  made about 13 percent of all income.
B)  paid about 22 percent of all taxes.
C)  made over 2.5 times the percentage of all income earned by the lowest quintile.
D)  All of the above are correct.E) All of the above
F) A) and C)

Question 10

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

Accepted Answer

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

Question 11

All of the following are transfer payments except

Accepted Answer

A)  welfare payments.
B)  unemployment compensation.
C)  personal income taxes.
D)  Social Security.E) B) and C)
F) None of the above

Question 12

In 2014, what were the two largest sources of federal tax revenues, and what were the two largest expenses of the federal government?

Accepted Answer

In 2014, individual income taxes and soc...

Question 13

Table 12-9
United States Income Tax Rates for a Single Individual, 2012 and 2013. 
-Refer to Table 12-9. Jake is a single person whose taxable income is $20,000 a year. What is his average tax rate in 2013?

Accepted Answer

A)  10%
B)  12.5%
C)  15%
D)  28%E) B) and C)
F) None of the above

Question 14

High marginal income tax rates

Accepted Answer

A)  distort incentives to work.
B)  are used to encourage saving behavior.
C)  will invariably lead to lower average tax rates.
D)  are not associated with deadweight losses.E) A) and B)
F) B) and C)

Question 15

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 regressive?

Accepted Answer

A)  Tax Schedule A and Tax Schedule B
B)  Tax Schedule B and Tax Schedule C
C)  Tax Schedule C and Tax Schedule D
D)  None of the Tax Schedules are regressive.E) A) and B)
F) B) and C)

Question 16

Which of the following is an example of a payroll tax?

Accepted Answer

A)  a tax on the wages that a firm pays its workers
B)  a "sin" tax on distilled alcohol
C)  a tax on corporate profits
D)  the portion of federal income taxes earmarked to pay for national defenseE) A) and D)
F) All of the above

Question 17

According to the ability-to-pay principle, it is fair for people to pay taxes based on their ability to handle the financial burden.

Accepted Answer

A) True 
 B)False

Question 18

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) All of the above
F) None of the above

Question 19

Table 12-16 
-Refer to Table 12-16. The tax system is

Accepted Answer

A)  proportional.
B)  regressive.
C)  progressive.
D)  lump sum.E) A) and B)
F) B) and C)

Question 20

The benefits principle is used to justify

Accepted Answer

A)  sales taxes.
B)  gasoline taxes.
C)  "sin" taxes on cigarettes and alcoholic beverages.
D)  personal income taxes.E) B) and D)
F) B) and C)

Exam 12: The Design of the Tax System

Sonja paid $15,000 in taxes after having earned $100,000. Amanda paid $22,000 in taxes after having earned an income of $146,667.This is an example of a proportional tax.

Correct Answer
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Table 12-9 United States Income Tax Rates for a Single Individual, 2012 and 2013. -Refer to Table 12-9. Jake is a single person whose taxable income is $20,000 a year. What is his average tax rate in 2013?

Correct Answer
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Define the deadweight loss of a tax.

Correct Answer
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The deadweight loss of a tax i...
View Answer

In practice, the U.S. income tax system is filled with special provisions that alter a family's tax based on its specific circumstances.

Correct Answer
verified

High marginal income tax rates

Correct Answer
verified

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

Correct Answer
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According to the ability-to-pay principle, it is fair for people to pay taxes based on their ability to handle the financial burden.

Correct Answer
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Table 12-16 -Refer to Table 12-16. The tax system is

Correct Answer
verified

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 regressive?

Correct Answer
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In 2014, what were the two largest sources of federal tax revenues, and what were the two largest expenses of the federal government?

Correct Answer
verified
In 2014, individual income taxes and soc...
View Answer

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

Correct Answer
verified

Table 12-21 The dollar amounts in the last three columns are the taxes owed under the three different tax systems. -Refer to Table 12-21. Which of the three tax systems is progressive?

Correct Answer
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If revenue from a cigarette tax is used to pay for healthcare for people with lung cancer, the cigarette tax may be justified on the basis of

Correct Answer
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Table 12-23 The dollar amounts in the last three columns are the taxes owed under the three different tax systems. -Refer to Table 12-23. Which of the three tax systems is regressive?

Correct Answer
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The benefits principle is used to justify

Correct Answer
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All of the following are transfer payments except

Correct Answer
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Which of the following is an example of a payroll tax?

Correct Answer
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In 2009, the top 1 percent of income earners

Correct Answer
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Which of the following tax systems is the most fair?

Correct Answer
verified

Exam 12: The Design of the Tax System

​Sonja paid $15,000 in taxes after having earned $100,000. Amanda paid $22,000 in taxes after having earned an income of $146,667.This is an example of a proportional tax.

Correct AnswerverifiedShow Answer

Table 12-9 United States Income Tax Rates for a Single Individual, 2012 and 2013. -Refer to Table 12-9. Jake is a single person whose taxable income is $20,000 a year. What is his average tax rate in 2013?

Correct AnswerverifiedShow Answer

Define the deadweight loss of a tax.

Correct AnswerverifiedThe deadweight loss of a tax i...View AnswerShow Answer

In practice, the U.S. income tax system is filled with special provisions that alter a family's tax based on its specific circumstances.

Correct AnswerverifiedShow Answer

High marginal income tax rates

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

According to the ability-to-pay principle, it is fair for people to pay taxes based on their ability to handle the financial burden.

Correct AnswerverifiedShow Answer

Table 12-16 -Refer to Table 12-16. The tax system is

Correct AnswerverifiedShow Answer

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 regressive?

Correct AnswerverifiedShow Answer

In 2014, what were the two largest sources of federal tax revenues, and what were the two largest expenses of the federal government?

Correct AnswerverifiedIn 2014, individual income taxes and soc...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Table 12-21 The dollar amounts in the last three columns are the taxes owed under the three different tax systems. -Refer to Table 12-21. Which of the three tax systems is progressive?

Correct AnswerverifiedShow Answer

If revenue from a cigarette tax is used to pay for healthcare for people with lung cancer, the cigarette tax may be justified on the basis of

Correct AnswerverifiedShow Answer

Table 12-23 The dollar amounts in the last three columns are the taxes owed under the three different tax systems. -Refer to Table 12-23. Which of the three tax systems is regressive?

Correct AnswerverifiedShow Answer

The benefits principle is used to justify

Correct AnswerverifiedShow Answer

All of the following are transfer payments except

Correct AnswerverifiedShow Answer

Which of the following is an example of a payroll tax?

Correct AnswerverifiedShow Answer

In 2009, the top 1 percent of income earners

Correct AnswerverifiedShow Answer

Which of the following tax systems is the most fair?

Correct AnswerverifiedShow Answer

Sonja paid $15,000 in taxes after having earned $100,000. Amanda paid $22,000 in taxes after having earned an income of $146,667.This is an example of a proportional tax.

Correct Answer
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The deadweight loss of a tax i...
View Answer

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In 2014, individual income taxes and soc...
View Answer

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