Question 1

Suppose that in 2020 the average citizen's federal tax bill is $14,888 per person, and total federal spending is $13,997 per person. In 2020, 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) B) and D)
F) A) and B)

Question 2

Of the following countries, which country's government collects the least amount of tax revenue as a percentage of that country's total income?

Accepted Answer

A)   Japan
B)   United States
C)   Mexico
D)   DenmarkE) A) and D)
F) All of the above

Question 3

The income tax requires that taxpayers pay 10 percent on the first $50,000 of income and 20 percent on all income over $50,000. Andy paid $9,000 in taxes. What were his marginal and average tax rates?

Accepted Answer

A)   20 percent and 13 percent, respectively
B)   20 percent and 15 percent, respectively
C)   10 percent and 13 percent respectively
D)   10 percent and 15 percent respectivelyE) C) and D)
F) All of the above

Question 4

The income tax requires that taxpayers pay 10percent on the first $40,000 of income and 20 percent on all income over $40,000. Emily paid $9,000 in taxes. What were her marginal and average tax rates?

Accepted Answer

A)   20 percent and 13.8 percent, respectively
B)   20 percent and 15 percent, respectively
C)   10 percent and 13.8 percent respectively
D)   10 percent and 15 percent respectivelyE) C) and D)
F) B) and C)

Question 5

Which tax system requires higher-income taxpayers to pay a higher percentage of their income in taxes?

Accepted Answer

A)   a progressive tax
B)   a proportional tax
C)   a regressive tax
D)   a lump-sum taxE) C) and D)
F) All of the above

Question 6

The share of federal government spending on healthcare has risen substantially over time. This is most likely a result of

Accepted Answer

A)   medical advances that provide new, better, but often more expensive medical treatments.
B)   a rising population of the elderly in the economy.
C)   health insurance reform that will include government subsidies for health insurance for many low-to- moderate income families.
D)   All of the above are important factors.E) All of the above
F) None of the above

Question 7

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) None of the above

Question 8

Table 12-25 
-Refer to Table 12-25. Do any of the plans achieve vertical equity?

Accepted Answer

Yes. People with hig...

Question 9

A tax on the wages that a firm pays its workers is called

Accepted Answer

A)   an income tax.
B)   an excise tax.
C)   a consumption tax.
D)   a payroll tax.E) B) and C)
F) All of the above

Question 10

What are the characteristic(s) of an efficient tax system?

Accepted Answer

One tax system is more efficie...

Question 11

Horizontal equity can be difficult to assess because it is difficult to compare the similarity of tax payers.

Accepted Answer

A) True 
 B)False

Question 12

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 proportional?

Accepted Answer

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

Question 13

Tax evasion is

Accepted Answer

A)   facilitated by legal deductions to taxable income.
B)   the same as tax avoidance.
C)   recommended by the American Accounting Association.
D)   illegal.E) C) and D)
F) All of the above

Question 14

Which of the following statements about state income taxes is correct?

Accepted Answer

A)   Some states do not tax income at all.
B)   If states tax income, they must follow federal guidelines for designing the tax structure.
C)   States are not allowed to have a higher marginal tax rate than the federal marginal tax rate.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 15

The resources that a taxpayer devotes to complying with the tax laws are a type of

Accepted Answer

A)   marginal tax.
B)   administrative burden.
C)   deadweight loss.
D)   Both b and c are correct.E) C) and D)
F) B) and D)

Question 16

Table 12-9
United States Income Tax Rates for a Single Individual, 2012 and 2013. 
-Refer to Table 12-9. Ruby Sue is a single person whose taxable income is $100,000 a year. What is her marginal tax rate in 2013?

Accepted Answer

A)   15%
B)   27%
C)   30%
D)   35%E) B) and D)
F) C) and D)

Question 17

Define horizontal equity and briefly describe some features of the U.S. federal income tax system that may interfere with achieving it.

Accepted Answer

Horizontal equity is the idea that taxpa...

Question 18

If the rich pay more in taxes than the poor, the tax system must be progressive.

Accepted Answer

A) True 
 B)False

Question 19

Suppose that the government collected taxes in the following fashion: people who earn less than $50,000 pay 25 percent in taxes, people who earn between $50,000 and $100,000 pay 35 percent in taxes, people who earn between $100,000 and $200,000 pay 30 percent in taxes, and people who earn more than $200,000 pay 28 percent in taxes. Which of the following statements is correct?

Accepted Answer

A)   The tax system is proportional for income levels less than $50,000 and regressive for income levels above $50,000.
B)   The tax system is regressive for income levels less than $100,000 and progressive for income levels above $100,000.
C)   The tax system is progressive for income levels less than $100,000 and regressive for income levels above $100,000.
D)   The tax system is progressive for income levels less than $50,000 and proportional for income levels above $100,000.E) B) and C)
F) B) and D)

Question 20

If tax revenues from a tax on fried foods are used to pay for healthcare expenses related to cardio-vascular diseases, the fried foods tax could be justified using the .

Accepted Answer

The answer of If tax revenues from a tax on...

Exam 12: The Design of the Tax System

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

Correct Answer
verified

The resources that a taxpayer devotes to complying with the tax laws are a type of

Correct Answer
verified

A tax on the wages that a firm pays its workers is called

Correct Answer
verified

Suppose that in 2020 the average citizen's federal tax bill is $14,888 per person, and total federal spending is $13,997 per person. In 2020, the federal government will have

Correct Answer
verified

What are the characteristic(s) of an efficient tax system?

Correct Answer
verified
One tax system is more efficie...
View Answer

Of the following countries, which country's government collects the least amount of tax revenue as a percentage of that country's total income?

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 proportional?

Correct Answer
verified

The income tax requires that taxpayers pay 10percent on the first $40,000 of income and 20 percent on all income over $40,000. Emily paid $9,000 in taxes. What were her marginal and average tax rates?

Correct Answer
verified

Which tax system requires higher-income taxpayers to pay a higher percentage of their income in taxes?

Correct Answer
verified

Table 12-25 -Refer to Table 12-25. Do any of the plans achieve vertical equity?

Correct Answer
verified
Yes. People with hig...
View Answer

Define horizontal equity and briefly describe some features of the U.S. federal income tax system that may interfere with achieving it.

Correct Answer
verified
Horizontal equity is the idea that taxpa...
View Answer

Horizontal equity can be difficult to assess because it is difficult to compare the similarity of tax payers.

Correct Answer
verified

The share of federal government spending on healthcare has risen substantially over time. This is most likely a result of

Correct Answer
verified

Correct Answer
verified

If tax revenues from a tax on fried foods are used to pay for healthcare expenses related to cardio-vascular diseases, the fried foods tax could be justified using the .

Correct Answer
verified

Tax evasion is

Correct Answer
verified

If the rich pay more in taxes than the poor, the tax system must be progressive.

Correct Answer
verified

Which of the following statements about state income taxes is correct?

Correct Answer
verified

The income tax requires that taxpayers pay 10 percent on the first $50,000 of income and 20 percent on all income over $50,000. Andy paid $9,000 in taxes. What were his marginal and average tax rates?

Correct Answer
verified

Table 12-9 United States Income Tax Rates for a Single Individual, 2012 and 2013. -Refer to Table 12-9. Ruby Sue is a single person whose taxable income is $100,000 a year. What is her marginal tax rate in 2013?

Correct Answer
verified

Exam 12: The Design of the Tax System

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

Correct AnswerverifiedShow Answer

The resources that a taxpayer devotes to complying with the tax laws are a type of

Correct AnswerverifiedShow Answer

A tax on the wages that a firm pays its workers is called

Correct AnswerverifiedShow Answer

Suppose that in 2020 the average citizen's federal tax bill is $14,888 per person, and total federal spending is $13,997 per person. In 2020, the federal government will have

Correct AnswerverifiedShow Answer

What are the characteristic(s) of an efficient tax system?

Correct AnswerverifiedOne tax system is more efficie...View AnswerShow Answer

Of the following countries, which country's government collects the least amount of tax revenue as a percentage of that country's total income?

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 proportional?

Correct AnswerverifiedShow Answer

The income tax requires that taxpayers pay 10percent on the first $40,000 of income and 20 percent on all income over $40,000. Emily paid $9,000 in taxes. What were her marginal and average tax rates?

Correct AnswerverifiedShow Answer

Which tax system requires higher-income taxpayers to pay a higher percentage of their income in taxes?

Correct AnswerverifiedShow Answer

Table 12-25 -Refer to Table 12-25. Do any of the plans achieve vertical equity?

Correct AnswerverifiedYes. People with hig...View AnswerShow Answer

Define horizontal equity and briefly describe some features of the U.S. federal income tax system that may interfere with achieving it.

Correct AnswerverifiedHorizontal equity is the idea that taxpa...View AnswerShow Answer

Horizontal equity can be difficult to assess because it is difficult to compare the similarity of tax payers.

Correct AnswerverifiedShow Answer

The share of federal government spending on healthcare has risen substantially over time. This is most likely a result of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If tax revenues from a tax on fried foods are used to pay for healthcare expenses related to cardio-vascular diseases, the fried foods tax could be justified using the .

Correct AnswerverifiedShow Answer

Tax evasion is

Correct AnswerverifiedShow Answer

If the rich pay more in taxes than the poor, the tax system must be progressive.

Correct AnswerverifiedShow Answer

Which of the following statements about state income taxes is correct?

Correct AnswerverifiedShow Answer

The income tax requires that taxpayers pay 10 percent on the first $50,000 of income and 20 percent on all income over $50,000. Andy paid $9,000 in taxes. What were his marginal and average tax rates?

Correct AnswerverifiedShow Answer

Table 12-9 United States Income Tax Rates for a Single Individual, 2012 and 2013. -Refer to Table 12-9. Ruby Sue is a single person whose taxable income is $100,000 a year. What is her marginal tax rate in 2013?

Correct AnswerverifiedShow Answer

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One tax system is more efficie...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Yes. People with hig...
View Answer

Correct Answer
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Horizontal equity is the idea that taxpa...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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