Question 1

Earmarked taxes are:

Accepted Answer

A)   taxes assessed only on certain taxpayers.
B)   taxes assessed to fund a specific purpose.
C)   taxes assessed for only a specific time period.
D)   taxes assessed to discourage less desirable behavior.
E)   None of the choices are correct.F) A) and B)
G) C) and D)

Question 2

The substitution effect:

Accepted Answer

A)   predicts that taxpayers will work harder to pay for consumer products when tax rates increase.
B)   is one of the effects considered in static forecasting.
C)   results in the government collecting more aggregate tax revenue than under the income effect.
D)   is typically more descriptive for taxpayers with lower disposable income.
E)   None of the choices are correct.F) D) and E)
G) A) and E)

Question 3

The tax base for the federal income tax is taxable income.

Accepted Answer

A) True 
 B)False

Question 4

If Susie earns $750,000 in taxable income and files as head of household for year 2018, what is Susie's average tax rate (rounded) ? (Use tax rate schedule) ".

Accepted Answer

A)   32.24%
B)   33.85%
C)   35.00%
D)   37.00%
E)   None of the choices are correct.F) A) and E)
G) A) and C)

Question 5

Estimated tax payments are one way the federal income tax system addresses the "certainty" criterion in evaluating tax systems.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is true regarding use taxes?

Accepted Answer

A)   A use tax is relatively easy to enforce compared to a sales tax.
B)   Use taxes attempt to eliminate any tax advantage of purchasing goods out of state.
C)   Use taxes encourage taxpayers to buy goods out of state to avoid paying sales tax in their home state.
D)   A use tax is generally a progressive tax.
E)   None of the choices are correct.F) A) and B)
G) C) and D)

Question 7

Manny, a single taxpayer, earns $65,000 per year in taxable income and an additional $12,000 per year in city of Boston bonds. What is Manny's current marginal tax rate for year 2018? (Use tax rate schedule)

Accepted Answer

A)   15.75%
B)   24.00%
C)   13.30%
D)   11.41%
E)   None of the choices are correct.F) C) and D)
G) B) and D)

Question 8

In addition to raising revenues, specific U.S. taxes may have other objectives (e.g., economic or social objectives).

Accepted Answer

A) True 
 B)False

Question 9

The concept of tax sufficiency:

Accepted Answer

A)   suggests the need for tax forecasting.
B)   suggests that a government should estimate how taxpayers will respond to changes in the current tax structure.
C)   suggests that a government should consider the income and substitution effects when changing tax rates.
D)   All of the choices are correct.
E)   None of the choices are correct.F) C) and E)
G) A) and C)

Question 10

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

Accepted Answer

A)   Sales tax
B)   Individual income tax
C)   Other
D)   Property tax
E)   None of the choices are correctF) A) and C)
G) A) and D)

Question 11

In considering the "economy" criterion in evaluating tax systems, one must consider this criterion from both the taxpayer and the government's perspective.

Accepted Answer

A) True 
 B)False

Question 12

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 2018, what is his average tax rate (rounded) ? (Use tax rate schedule)

Accepted Answer

A)   15.23%
B)   12.00%
C)   7.42%
D)   22.00%
E)   None of the choices are correctF) D) and E)
G) C) and D)

Question 13

A sales tax is a common example of a progressive tax rate structure.

Accepted Answer

A) True 
 B)False

Question 14

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 15

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 the choices are correctF) A) and D)
G) B) and C)

Question 16

While sales taxes are quite common, currently the U.S. federal government does not impose a sales tax.

Accepted Answer

A) True 
 B)False

Question 17

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...

Question 18

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 the choices are correct.F) B) and E)
G) B) and D)

Question 19

Curtis invests $250,000 in a city of Athens bond that pays 7% interest. Alternatively, Curtis could have invested the $250,000 in a bond recently issued by Initech, Inc. that pays 9% interest with similar risk as the city of Athens bond. Assume that Curtis's marginal tax rate is 24%. If Curtis invested in the Initech, Inc. bonds, what would be his after-tax rate of return from this investment?

Accepted Answer

A)   5.32%
B)   7.00%
C)   6.84%
D)   2.52%
E)   None of the choices are correct.F) D) and E)
G) None of the above

Question 20

Taxes influence which of the following decisions?

Accepted Answer

A)   Business decisions
B)   Personal decisions
C)   Political decisions
D)   Investment decisions
E)   All of the choices are correct.F) A) and E)
G) C) and D)

Exam 1: An Introduction to Tax

A sales tax is a common example of a progressive tax rate structure.

Correct Answer
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Correct Answer
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The tax base for the federal income tax is taxable income.

Correct Answer
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In addition to raising revenues, specific U.S. taxes may have other objectives (e.g., economic or social objectives).

Correct Answer
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The substitution effect:

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

Correct Answer
verified

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

Correct Answer
verified

Estimated tax payments are one way the federal income tax system addresses the "certainty" criterion in evaluating tax systems.

Correct Answer
verified

If Susie earns $750,000 in taxable income and files as head of household for year 2018, what is Susie's average tax rate (rounded) ? (Use tax rate schedule) ".

Correct Answer
verified

Which of the following is true regarding use taxes?

Correct Answer
verified

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

Correct Answer
verified

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 Answer
verified
a. Not a tax because receiving a specifi...
View Answer

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

The concept of tax sufficiency:

Correct Answer
verified

In considering the "economy" criterion in evaluating tax systems, one must consider this criterion from both the taxpayer and the government's perspective.

Correct Answer
verified

While sales taxes are quite common, currently the U.S. federal government does not impose a sales tax.

Correct Answer
verified

Earmarked taxes are:

Correct Answer
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Manny, a single taxpayer, earns $65,000 per year in taxable income and an additional $12,000 per year in city of Boston bonds. What is Manny's current marginal tax rate for year 2018? (Use tax rate schedule)

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 2018, what is his average tax rate (rounded) ? (Use tax rate schedule)

Correct Answer
verified

Taxes influence which of the following decisions?

Correct Answer
verified

Exam 1: An Introduction to Tax

A sales tax is a common example of a progressive tax rate structure.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The tax base for the federal income tax is taxable income.

Correct AnswerverifiedShow Answer

In addition to raising revenues, specific U.S. taxes may have other objectives (e.g., economic or social objectives).

Correct AnswerverifiedShow Answer

The substitution effect:

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

Estimated tax payments are one way the federal income tax system addresses the "certainty" criterion in evaluating tax systems.

Correct AnswerverifiedShow Answer

If Susie earns $750,000 in taxable income and files as head of household for year 2018, what is Susie's average tax rate (rounded) ? (Use tax rate schedule) ".

Correct AnswerverifiedShow Answer

Which of the following is true regarding use taxes?

Correct AnswerverifiedShow Answer

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

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

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

The concept of tax sufficiency:

Correct AnswerverifiedShow Answer

In considering the "economy" criterion in evaluating tax systems, one must consider this criterion from both the taxpayer and the government's perspective.

Correct AnswerverifiedShow Answer

While sales taxes are quite common, currently the U.S. federal government does not impose a sales tax.

Correct AnswerverifiedShow Answer

Earmarked taxes are:

Correct AnswerverifiedShow Answer

Manny, a single taxpayer, earns $65,000 per year in taxable income and an additional $12,000 per year in city of Boston bonds. What is Manny's current marginal tax rate for year 2018? (Use tax rate schedule)

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 2018, what is his average tax rate (rounded) ? (Use tax rate schedule)

Correct AnswerverifiedShow Answer

Taxes influence which of the following decisions?

Correct AnswerverifiedShow Answer

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a. Not a tax because receiving a specifi...
View Answer

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