Question 1

The main difficulty in calculating an income tax is determining the correct amount of the tax base.

Accepted Answer

A) True 
 B)False

Question 2

Marc, a single taxpayer, earns $60,000 in taxable income and $5,000 in interest from an investment in city of Birmingham Bonds. Using the U.S. tax rate schedule for year 2016, what is his average tax rate (rounded) ?

Accepted Answer

A)  17.95%
B)  15.00%
C)  18.49%
D)  25.00%
E)  None of theseF) A) and D)
G) A) and E)

Question 3

Congress recently approved a new, bigger budget for the IRS. What taxation concept evaluates the cost of administering our tax law?

Accepted Answer

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

Question 4

Jackson has the choice to invest in city of Mitchell bonds or Sundial, Inc. corporate bonds that pay 10% interest. Jackson is a single taxpayer who earns $55,000 annually. Assume that the city of Mitchell bonds and the Sundial, Inc. bonds have similar risk.
What interest rate would the city of Mitchell have to pay in order to make Jackson indifferent between investing in the city of Mitchell and the Sundial, Inc. bonds for year 2016?

Accepted Answer

A)  7.50%
B)  10.00%
C)  8.00%
D)  7.20%
E)  None of theseF) A) and D)
G) None of the above

Question 5

The effective tax rate expresses the taxpayer's total tax as a percentage of the taxpayer's taxable and nontaxable income.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Relative to explicit taxes, implicit taxes are much easier to estimate.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is considered a tax?

Accepted Answer

A)  Tolls
B)  Parking meter fees
C)  Annual licensing fees
D)  A local surcharge paid on retail sales to fund public schools
E)  Entrance fees paid at national parksF) A) and C)
G) All of the above

Question 9

Which of the following would not be a failure of the horizontal equity concept?

Accepted Answer

A)  Two taxpayers with identical income pay different amounts of tax because one taxpayer's income includes tax exempt interest.
B)  Two taxpayers pay different amounts of property tax amounts on similar plots of land (i.e., same value)  because one plot of land is used to raise crops.
C)  Two taxpayers pay different amounts of estate tax because one taxpayer's estate is worth significantly more.
D)  All of these.
E)  None of these.F) B) and C)
G) All of the above

Question 10

Consider the following tax rate structures. Is it horizontally equitable? Why or why not? Is it vertically equitable? Why or why not?

Accepted Answer

The tax rate schedule is horizontally eq...

Exam 1: An Introduction to Tax

Consider the following tax rate structures. Is it horizontally equitable? Why or why not? Is it vertically equitable? Why or why not?

Correct Answer
verified
The tax rate schedule is horizontally eq...
View Answer

Which of the following is considered a tax?

Correct Answer
verified

Marc, a single taxpayer, earns $60,000 in taxable income and $5,000 in interest from an investment in city of Birmingham Bonds. Using the U.S. tax rate schedule for year 2016, what is his average tax rate (rounded) ?

Correct Answer
verified

The main difficulty in calculating an income tax is determining the correct amount of the tax base.

Correct Answer
verified

Relative to explicit taxes, implicit taxes are much easier to estimate.

Correct Answer
verified

Which of the following would not be a failure of the horizontal equity concept?

Correct Answer
verified

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

Correct Answer
verified

The effective tax rate expresses the taxpayer's total tax as a percentage of the taxpayer's taxable and nontaxable income.

Correct Answer
verified

Congress recently approved a new, bigger budget for the IRS. What taxation concept evaluates the cost of administering our tax law?

Correct Answer
verified

Correct Answer
verified

Exam 1: An Introduction to Tax

Consider the following tax rate structures. Is it horizontally equitable? Why or why not? Is it vertically equitable? Why or why not?

Correct AnswerverifiedThe tax rate schedule is horizontally eq...View AnswerShow Answer

Which of the following is considered a tax?

Correct AnswerverifiedShow Answer

Marc, a single taxpayer, earns $60,000 in taxable income and $5,000 in interest from an investment in city of Birmingham Bonds. Using the U.S. tax rate schedule for year 2016, what is his average tax rate (rounded) ?

Correct AnswerverifiedShow Answer

The main difficulty in calculating an income tax is determining the correct amount of the tax base.

Correct AnswerverifiedShow Answer

Relative to explicit taxes, implicit taxes are much easier to estimate.

Correct AnswerverifiedShow Answer

Which of the following would not be a failure of the horizontal equity concept?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The effective tax rate expresses the taxpayer's total tax as a percentage of the taxpayer's taxable and nontaxable income.

Correct AnswerverifiedShow Answer

Congress recently approved a new, bigger budget for the IRS. What taxation concept evaluates the cost of administering our tax law?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified
The tax rate schedule is horizontally eq...
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