Question 1

The Bush tax cuts concentrated on reducing ____ tax rates which means they can be expected to improve economic ____.

Accepted Answer

A)   marginal; efficiency
B)   marginal; equity
C)   average; efficiency
D)   average; equityE) A) and B)
F) All of the above

Question 2

Figure 18-2
 
-Figure 18-2 shows the widget market before and after an excise tax is imposed.What percentage of the tax per widget is borne by consumers, considering the true economic incidence of the tax?

Accepted Answer

A)   0 percent
B)   20 percent
C)   50 percent
D)   80 percentE) B) and C)
F) A) and B)

Question 3

Many Americans believe that taxes have been gobbling up an ever-increasing share of the U.S.economy.Is this observation correct? Explain.

Accepted Answer

Available data suggests that the share o...

Question 4

Rhode Island has enacted a substantial increase in the tax on employers that finances the workman's compensation system.For some employers, the tax is about $25 per $100 paid in wages.Employers claim they cannot afford to pay the tax.Under which of the following conditions will the actual burden of the tax fall on employers?

Accepted Answer

A)   The employers' demand for labor is perfectly elastic.
B)   The supply of labor is perfectly inelastic.
C)   The employers' demand for labor is perfectly inelastic.
D)   The demand for the good they produce must be perfectly inelastic.E) A) and B)
F) B) and D)

Question 5

An excise tax

Accepted Answer

A)   is a sales tax on the purchase of a particular good or service.
B)   is a tax on the profits earned from the sale of an asset.
C)   represents a surcharge on corporate profits beyond the normal corporate tax rate.
D)   is a tax on income-earning rental property.E) C) and D)
F) A) and D)

Question 6

The individual income tax, the inheritance tax, and the head tax are all examples of direct taxes.

Accepted Answer

A) True 
 B)False

Question 7

The way in which most persons pay their personal income tax is in the form of

Accepted Answer

A)   quarterly payments throughout the year.
B)   annual payment by April 15.
C)   monthly payments as part of mortgage payments.
D)   payroll withholding during the year.E) A) and B)
F) None of the above

Question 8

The federal income tax is a good example of a

Accepted Answer

A)   regressive tax.
B)   proportional tax.
C)   digressive tax.
D)   progressive tax.E) A) and B)
F) None of the above

Question 9

The largest single source of revenue for the federal government is the

Accepted Answer

A)   corporate income tax.
B)   federal excise tax.
C)   personal income tax.
D)   Social Security tax.E) None of the above
F) A) and B)

Question 10

Most loopholes in the income tax system

Accepted Answer

A)   are more likely to be exploited by the wealthy.
B)   make it more progressive.
C)   were created by the tax reforms instituted in 1986.
D)   do not affect the economic decisions of the people who benefit from them.E) None of the above
F) C) and D)

Question 11

Corporate taxes are a direct tax.

Accepted Answer

A) True 
 B)False

Question 12

The method of financing the Social Security system until 1983 is best described as

Accepted Answer

A)   trust fund.
B)   excise tax.
C)   indirect tax.
D)   "pay as you go."E) All of the above
F) C) and D)

Question 13

The most important indirect taxes in the United States are

Accepted Answer

A)   federal and state income taxes.
B)   inheritance taxes.
C)   corporate profits taxes.
D)   sales and property taxes.E) B) and C)
F) B) and D)

Question 14

If two families are equally situated except that one rents and the other owns their home, the existing tax system will lead to

Accepted Answer

A)   vertical inequity.
B)   equal treatment of both.
C)   horizontal inequity.
D)   equal burden sharing.E) A) and B)
F) None of the above

Question 15

Which of the following best reflects the ability-to-pay philosophy of taxation?

Accepted Answer

A)   an excise tax on coffee
B)   an excise tax on gasoline
C)   a progressive income tax
D)   a tax on residential propertyE) B) and C)
F) C) and D)

Question 16

What were the arguments in favor and against repealing the Bush tax cuts?

Accepted Answer

The arguments against repealing the Bush...

Question 17

A proportional tax is one in which the fraction of income paid in taxes rises as a person's income increases.

Accepted Answer

A) True 
 B)False

Question 18

The corporate income tax is

Accepted Answer

A)   an indirect tax.
B)   a regressive tax.
C)   the second largest source of revenue for the federal government.
D)   a direct tax.E) A) and D)
F) A) and C)

Question 19

Explain the excess burden of a tax on luxury yachts.

Accepted Answer

A tax on luxury yachts, say of $1,000, w...

Question 20

Which of the following government entities relies most heavily on sales taxes?

Accepted Answer

A)   local government
B)   state government
C)   federal government
D)   the Social Security AdministrationE) All of the above
F) A) and D)

Exam 18: Taxation and Resource Allocation

Explain the excess burden of a tax on luxury yachts.

Correct Answer
verified
A tax on luxury yachts, say of $1,000, w...
View Answer

Corporate taxes are a direct tax.

Correct Answer
verified

The largest single source of revenue for the federal government is the

Correct Answer
verified

The federal income tax is a good example of a

Correct Answer
verified

If two families are equally situated except that one rents and the other owns their home, the existing tax system will lead to

Correct Answer
verified

Figure 18-2 -Figure 18-2 shows the widget market before and after an excise tax is imposed.What percentage of the tax per widget is borne by consumers, considering the true economic incidence of the tax?

Correct Answer
verified

A proportional tax is one in which the fraction of income paid in taxes rises as a person's income increases.

Correct Answer
verified

The individual income tax, the inheritance tax, and the head tax are all examples of direct taxes.

Correct Answer
verified

The method of financing the Social Security system until 1983 is best described as

Correct Answer
verified

Which of the following best reflects the ability-to-pay philosophy of taxation?

Correct Answer
verified

The most important indirect taxes in the United States are

Correct Answer
verified

Correct Answer
verified

An excise tax

Correct Answer
verified

Many Americans believe that taxes have been gobbling up an ever-increasing share of the U.S.economy.Is this observation correct? Explain.

Correct Answer
verified
Available data suggests that the share o...
View Answer

Most loopholes in the income tax system

Correct Answer
verified

The Bush tax cuts concentrated on reducing tax rates which means they can be expected to improve economic .

Correct Answer
verified

Which of the following government entities relies most heavily on sales taxes?

Correct Answer
verified

The way in which most persons pay their personal income tax is in the form of

Correct Answer
verified

What were the arguments in favor and against repealing the Bush tax cuts?

Correct Answer
verified
The arguments against repealing the Bush...
View Answer

The corporate income tax is

Correct Answer
verified

Exam 18: Taxation and Resource Allocation

Explain the excess burden of a tax on luxury yachts.

Correct AnswerverifiedA tax on luxury yachts, say of $1,000, w...View AnswerShow Answer

Corporate taxes are a direct tax.

Correct AnswerverifiedShow Answer

The largest single source of revenue for the federal government is the

Correct AnswerverifiedShow Answer

The federal income tax is a good example of a

Correct AnswerverifiedShow Answer

If two families are equally situated except that one rents and the other owns their home, the existing tax system will lead to

Correct AnswerverifiedShow Answer

Figure 18-2 -Figure 18-2 shows the widget market before and after an excise tax is imposed.What percentage of the tax per widget is borne by consumers, considering the true economic incidence of the tax?

Correct AnswerverifiedShow Answer

A proportional tax is one in which the fraction of income paid in taxes rises as a person's income increases.

Correct AnswerverifiedShow Answer

The individual income tax, the inheritance tax, and the head tax are all examples of direct taxes.

Correct AnswerverifiedShow Answer

The method of financing the Social Security system until 1983 is best described as

Correct AnswerverifiedShow Answer

Which of the following best reflects the ability-to-pay philosophy of taxation?

Correct AnswerverifiedShow Answer

The most important indirect taxes in the United States are

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An excise tax

Correct AnswerverifiedShow Answer

Many Americans believe that taxes have been gobbling up an ever-increasing share of the U.S.economy.Is this observation correct? Explain.

Correct AnswerverifiedAvailable data suggests that the share o...View AnswerShow Answer

Most loopholes in the income tax system

Correct AnswerverifiedShow Answer

The Bush tax cuts concentrated on reducing ____ tax rates which means they can be expected to improve economic ____.

Correct AnswerverifiedShow Answer

Which of the following government entities relies most heavily on sales taxes?

Correct AnswerverifiedShow Answer

The way in which most persons pay their personal income tax is in the form of

Correct AnswerverifiedShow Answer

What were the arguments in favor and against repealing the Bush tax cuts?

Correct AnswerverifiedThe arguments against repealing the Bush...View AnswerShow Answer

The corporate income tax is

Correct AnswerverifiedShow Answer

Correct Answer
verified
A tax on luxury yachts, say of $1,000, w...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Available data suggests that the share o...
View Answer

Correct Answer
verified

The Bush tax cuts concentrated on reducing tax rates which means they can be expected to improve economic .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The arguments against repealing the Bush...
View Answer

Correct Answer
verified