Question 1

Sin taxes are:

Accepted Answer

A)   Taxes assessed by religious organizations
B)   Taxes assessed on certain illegal acts
C)   Taxes assessed to discourage less desirable behavior
D)   Taxes assessed to fund a specific purpose
E)   None of theseF) None of the above
G) A) and C)

Question 2

The ultimate economic burden of a tax is best captured by:

Accepted Answer

A)   The marginal tax rate
B)   The effective tax rate
C)   The average tax rate
D)   The proportional tax rate
E)   None of these is correctF) A) and E)
G) None of the above

Question 3

Employers often withhold federal income taxes directly from worker's paychecks. This is an example of which principle in practice?

Accepted Answer

A)   Convenience
B)   Certainty
C)   Economy
D)   Equity
E)   None of theseF) None of the above
G) B) and C)

Question 4

Which of the following is not one of the basic tax rate structures?

Accepted Answer

A)   Proportional
B)   Equitable
C)   Regressive
D)   Progressive
E)   All of these are different kinds of the basic tax rate structuresF) D) and E)
G) B) and E)

Question 5

If Manny earns an additional $35,000 in taxable income in year 2014, what is his marginal tax rate (rounded)  on this income?

Accepted Answer

A)   22.49%
B)   28.00%
C)   25.91%
D)   25.00%
E)   None of theseF) B) and E)
G) A) and C)

Question 6

Regressive tax rate structures are typically considered to be vertically equitable.

Accepted Answer

A) True 
 B)False

Question 7

Common examples of sin taxes include the taxes imposed on airline tickets and gasoline.

Accepted Answer

A) True 
 B)False

Question 8

In a proportional (flat) tax rate system, the marginal tax rate will always equal the average tax rate.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following taxes represents the largest portion of U.S. Federal Tax revenues?

Accepted Answer

A)   Employment taxes
B)   Corporate income taxes
C)   Individual income taxes
D)   Estate and gift taxes
E)   None of theseF) None of the above
G) B) and C)

Question 10

Bart is contemplating starting his own business. His new business would operate as a sole proprietorship and would require hiring several employees. Describe the employment-related taxes that Bart should be aware of as he starts his new business as a self-employed business owner.

Accepted Answer

Employment taxes consist of the Old Age,...

Question 11

Which of the following represents the largest percentage of state tax revenue?

Accepted Answer

A)   Sales tax
B)   Individual income tax
C)   Other
D)   Property tax
E)   None of theseF) C) and D)
G) A) and B)

Question 12

What is Leonardo and Theresa's effective tax rate for year 2014 (rounded) ?

Accepted Answer

A)   15.00%
B)   18.63%
C)   21.28%
D)   28.00%
E)   None of theseF) B) and D)
G) A) and C)

Question 13

Margaret was issued a $150 speeding ticket. This is:

Accepted Answer

A)   A tax because payment is required by law
B)   A tax because the payment is not related to any specific benefit received from the government agency collecting the ticket
C)   Not a tax because it is considered a fine intended to punish illegal behavior
D)   A tax because it is imposed by a government agency
E)   Not a tax because Margaret could have avoided payment if she did not speedF) All of the above
G) A) and B)

Question 14

One benefit of a sin tax (e.g., a tax on cigarettes) is that it should increase the demand for the products being taxed.

Accepted Answer

A) True 
 B)False

Question 15

Horizontal equity is defined in terms of taxpayers in similar situations whereas vertical equity is defined in terms of taxpayers in different situations.

Accepted Answer

A) True 
 B)False

Question 16

For each of the following, determine if each is a tax and why or why not.
a. $2.50 toll paid on the Florida Turnpike
b. $300 ticket for reckless driving
c. 1% local surcharge on hotel rooms to fund public roadways
d. 2% city surcharge on wages earned in the city of Philadelphia

Accepted Answer

a. not a tax because receiving a specifi...

Question 17

The effective tax rate, in general, provides a better depiction of a taxpayer's tax burden than the average tax rate.

Accepted Answer

A) True 
 B)False

Question 18

A common example of an employment related tax is the Medicare tax.

Accepted Answer

A) True 
 B)False

Question 19

In a regressive tax rate system, the marginal tax rate will often be greater than the average tax rate.

Accepted Answer

A) True 
 B)False

Question 20

A flat tax is an example of a graduated tax system.

Accepted Answer

A) True 
 B)False

Exam 1: An Introduction to Tax

If Manny earns an additional $35,000 in taxable income in year 2014, what is his marginal tax rate (rounded) on this income?

Correct AnswerverifiedShow Answer

In a regressive tax rate system, the marginal tax rate will often be greater than the average tax rate.

Correct AnswerverifiedShow Answer

Which of the following represents the largest percentage of state tax revenue?

Correct AnswerverifiedShow Answer

Common examples of sin taxes include the taxes imposed on airline tickets and gasoline.

Correct AnswerverifiedShow Answer

A flat tax is an example of a graduated tax system.

Correct AnswerverifiedShow Answer

Bart is contemplating starting his own business. His new business would operate as a sole proprietorship and would require hiring several employees. Describe the employment-related taxes that Bart should be aware of as he starts his new business as a self-employed business owner.

Correct AnswerverifiedEmployment taxes consist of the Old Age,...View AnswerShow Answer

In a proportional (flat) tax rate system, the marginal tax rate will always equal the average tax rate.

Correct AnswerverifiedShow Answer

For each of the following, determine if each is a tax and why or why not. a. $2.50 toll paid on the Florida Turnpike b. $300 ticket for reckless driving c. 1% local surcharge on hotel rooms to fund public roadways d. 2% city surcharge on wages earned in the city of Philadelphia

Correct Answerverifieda. not a tax because receiving a specifi...View AnswerShow Answer

What is Leonardo and Theresa's effective tax rate for year 2014 (rounded) ?

Correct AnswerverifiedShow Answer

Horizontal equity is defined in terms of taxpayers in similar situations whereas vertical equity is defined in terms of taxpayers in different situations.

Correct AnswerverifiedShow Answer

The ultimate economic burden of a tax is best captured by:

Correct AnswerverifiedShow Answer

The effective tax rate, in general, provides a better depiction of a taxpayer's tax burden than the average tax rate.

Correct AnswerverifiedShow Answer

Which of the following taxes represents the largest portion of U.S. Federal Tax revenues?

Correct AnswerverifiedShow Answer

Employers often withhold federal income taxes directly from worker's paychecks. This is an example of which principle in practice?

Correct AnswerverifiedShow Answer

Margaret was issued a $150 speeding ticket. This is:

Correct AnswerverifiedShow Answer

Which of the following is not one of the basic tax rate structures?

Correct AnswerverifiedShow Answer

One benefit of a sin tax (e.g., a tax on cigarettes) is that it should increase the demand for the products being taxed.

Correct AnswerverifiedShow Answer

Sin taxes are:

Correct AnswerverifiedShow Answer

Regressive tax rate structures are typically considered to be vertically equitable.

Correct AnswerverifiedShow Answer

A common example of an employment related tax is the Medicare tax.

Correct AnswerverifiedShow Answer

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Employment taxes consist of the Old Age,...
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a. not a tax because receiving a specifi...
View Answer

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