Question 1

Which of the following is NOT an important source of revenue for the federal government?

Accepted Answer

A)   individual income taxes
B)   property taxes
C)   social insurance taxes and contributions
D)   corporate income taxesE) All of the above
F) C) and D)

Question 2

Social Security taxes are paid by

Accepted Answer

A)   employers only.
B)   employees only.
C)   both employers and employees.
D)   neither employers nor employees.E) None of the above
F) A) and B)

Question 3

Under a progressive income tax system, the marginal income tax rate paid by taxpayers

Accepted Answer

A)   declines as their incomes increase.
B)   rises as their incomes increase.
C)   is unchanged as their incomes increase.
D)   is unrelated to their incomes.E) All of the above
F) B) and C)

Question 4

In what type of analysis will an increase in the tax rate always lead to an increase in tax revenues?

Accepted Answer

A)   ad valorem taxation
B)   excise taxation
C)   dynamic tax analysis
D)   static tax analysisE) A) and B)
F) A) and C)

Question 5

Using the fiscal year 2017 estimates, the largest component of federal revenue is the

Accepted Answer

A)   individual income tax.
B)   corporate income tax.
C)   excise tax.
D)   social insurance and contributions.E) B) and C)
F) A) and D)

Question 6

Dynamic tax analysis assumes that

Accepted Answer

A)   an increase in a tax rate may lead to a decrease in the tax base.
B)   an increase in a tax rate will lead to an increase in the tax base.
C)   an increase in a tax rate will leave the tax base unchanged.
D)   the tax base will always remain unchanged.E) A) and C)
F) B) and C)

Question 7

Suppose you are making $50,000 per year and paying $5,000 per year in income taxes. You get a $10,000 per year raise and your income taxes are now $6,500 per year. Based on this information, the income tax system is

Accepted Answer

A)   proportional.
B)   progressive.
C)   regressive.
D)   bracketed.E) B) and D)
F) A) and B)

Question 8

Suppose the income tax rate schedule is 0 percent on the first $10,000; 10 percent on the next $20,000; 20 percent on the next $20,000; 30 percent on the next $20,000; and 40 percent on any income over $70,000. Family A earns $28,000 a year and Family B earns $65,000 a year. Both receive a ten percent raise. What is the marginal tax rate of each and what is the extra tax paid by each after the raise?

Accepted Answer

A)   Family A: 10 percent marginal tax rate and $280 in extra taxes; Family B-30 percent marginal tax rate and $1950 in extra taxes.
B)   Family A: 10 percent marginal tax rate and $420 in extra taxes; Family B-30 percent marginal tax rate and $2275 in extra taxes.
C)   Family A: 20 percent marginal tax rate and $360 in extra taxes; Family B-40 percent marginal tax rate and $2100 in extra taxes.
D)   Family A: 20 percent marginal tax rate and $560 in extra taxes. Family B-40 percent marginal tax rate and $2600 in extra taxes.E) A) and D)
F) A) and C)

Question 9

An example of a regressive tax is the

Accepted Answer

A)   corporate income tax.
B)   personal income tax.
C)   Social Security tax.
D)   state inheritance tax.E) A) and C)
F) All of the above

Question 10

-Sales taxes are routinely collected by

Accepted Answer

A)   the merchants selling the good or services.
B)   the Internal Revenue Service.
C)   the Department of Commerce.
D)   the Federal Trade Commission.E) A) and B)
F) None of the above

Question 11

The marginal tax rate is

Accepted Answer

A)   the sum of all individual tax rates.
B)   the total taxes paid as a percentage of total income.
C)   the average tax rate paid by both individuals and corporations.
D)   the increase in taxes as a percentage of the increase in income.E) A) and B)
F) A) and C)

Question 12

The main source of government funding is

Accepted Answer

A)   user fees.
B)   taxes.
C)   borrowing.
D)   transfer payments.E) None of the above
F) B) and C)

Question 13

Ad valorem taxes

Accepted Answer

A)   are not used in the United States.
B)   are paid as a fixed percentage of a good's unit price.
C)   are based on income levels.
D)   are accessed based on the costs of producing the goods or services.E) A) and B)
F) B) and C)

Question 14

"Only in a progressive tax system does the amount of taxes increase as income increases." Do you agree or disagree? Explain.

Accepted Answer

Disagree. In all of the three tax system...

Question 15

A sales tax is

Accepted Answer

A)   a tax assessed on personal income.
B)   a tax assessed on the prices paid for numerous goods and services.
C)   a tax assessed on a public good.
D)   the total tax base.E) A) and C)
F) All of the above

Question 16

-Using the above table, a unit tax of $2 is imposed on the product. How much of the tax is paid by the consumer?

Accepted Answer

A)   $1
B)   $2
C)   $3
D)   unable to determineE) All of the above
F) A) and C)

Question 17

-The Social Security tax is considered to be a

Accepted Answer

A)   regressive tax.
B)   progressive tax.
C)   proportional tax.
D)   marginal tax.E) A) and D)
F) A) and C)

Question 18

Another name for a "flat-rate tax" in which the same tax rate applies to all income earners is a

Accepted Answer

A)   proportional tax.
B)   progressive tax.
C)   regressive tax.
D)   passive tax.E) A) and C)
F) C) and D)

Question 19

The federal income tax code of the United States is

Accepted Answer

A)   progressive.
B)   proportional.
C)   regressive.
D)   progressive for individuals but proportional for married couples.E) C) and D)
F) B) and C)

Question 20

Sales taxes are

Accepted Answer

A)   assessed on the prices paid on a large set of goods and services.
B)   levied on purchases of a particular good or service.
C)   based on each individual taxpayer's income level.
D)   collected only by the U.S. government.E) All of the above
F) B) and C)

Exam 6: Funding the Public Sector

Dynamic tax analysis assumes that

Correct Answer
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Another name for a "flat-rate tax" in which the same tax rate applies to all income earners is a

Correct Answer
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An example of a regressive tax is the

Correct Answer
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Social Security taxes are paid by

Correct Answer
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-The Social Security tax is considered to be a

Correct Answer
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The federal income tax code of the United States is

Correct Answer
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Which of the following is NOT an important source of revenue for the federal government?

Correct Answer
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In what type of analysis will an increase in the tax rate always lead to an increase in tax revenues?

Correct Answer
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Suppose you are making $50,000 per year and paying $5,000 per year in income taxes. You get a $10,000 per year raise and your income taxes are now $6,500 per year. Based on this information, the income tax system is

Correct Answer
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-Using the above table, a unit tax of $2 is imposed on the product. How much of the tax is paid by the consumer?

Correct Answer
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Under a progressive income tax system, the marginal income tax rate paid by taxpayers

Correct Answer
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A sales tax is

Correct Answer
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-Sales taxes are routinely collected by

Correct Answer
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The marginal tax rate is

Correct Answer
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Using the fiscal year 2017 estimates, the largest component of federal revenue is the

Correct Answer
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Sales taxes are

Correct Answer
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The main source of government funding is

Correct Answer
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Ad valorem taxes

Correct Answer
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"Only in a progressive tax system does the amount of taxes increase as income increases." Do you agree or disagree? Explain.

Correct Answer
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Disagree. In all of the three tax system...
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Exam 6: Funding the Public Sector

Dynamic tax analysis assumes that

Correct AnswerverifiedShow Answer

Another name for a "flat-rate tax" in which the same tax rate applies to all income earners is a

Correct AnswerverifiedShow Answer

An example of a regressive tax is the

Correct AnswerverifiedShow Answer

Social Security taxes are paid by

Correct AnswerverifiedShow Answer

-The Social Security tax is considered to be a

Correct AnswerverifiedShow Answer

The federal income tax code of the United States is

Correct AnswerverifiedShow Answer

Which of the following is NOT an important source of revenue for the federal government?

Correct AnswerverifiedShow Answer

In what type of analysis will an increase in the tax rate always lead to an increase in tax revenues?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose you are making $50,000 per year and paying $5,000 per year in income taxes. You get a $10,000 per year raise and your income taxes are now $6,500 per year. Based on this information, the income tax system is

Correct AnswerverifiedShow Answer

-Using the above table, a unit tax of $2 is imposed on the product. How much of the tax is paid by the consumer?

Correct AnswerverifiedShow Answer

Under a progressive income tax system, the marginal income tax rate paid by taxpayers

Correct AnswerverifiedShow Answer

A sales tax is

Correct AnswerverifiedShow Answer

-Sales taxes are routinely collected by

Correct AnswerverifiedShow Answer

The marginal tax rate is

Correct AnswerverifiedShow Answer

Using the fiscal year 2017 estimates, the largest component of federal revenue is the

Correct AnswerverifiedShow Answer

Sales taxes are

Correct AnswerverifiedShow Answer

The main source of government funding is

Correct AnswerverifiedShow Answer

Ad valorem taxes

Correct AnswerverifiedShow Answer

"Only in a progressive tax system does the amount of taxes increase as income increases." Do you agree or disagree? Explain.

Correct AnswerverifiedDisagree. In all of the three tax system...View AnswerShow Answer

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Disagree. In all of the three tax system...
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