Question 1

Are property taxes progressive or regressive?

Accepted Answer

The nature of property taxes is controve...

Question 2

The United States Social Security system

Accepted Answer

A)  pays benefits in direct accordance to what each individual has paid into the system.
B)  has paid the current generation of recipients less in benefits than it paid in payroll taxes.
C)  has paid the current generation of recipients more than it paid in payroll taxes.
D)  paid the earlier generations more and the current generation less than each paid in payroll taxes.E) None of the above
F) B) and D)

Question 3

The money for Social Security payments to current retirees comes from

Accepted Answer

A)  payroll taxes collected from those retirees when they were working.
B)  income taxes collected from the current working population.
C)  payroll taxes collected from the current working population.
D)  only the interest earned now by the government on the invested Social Security trust fund.E) None of the above
F) C) and D)

Question 4

Which of the following is not true for the U.S.payroll tax?

Accepted Answer

A)  The incidence falls mainly on employees.
B)  It is levied on employers.
C)  It is levied on employees.
D)  The incidence falls mainly on employers.E) A) and B)
F) All of the above

Question 5

What are the arguments for and against federal government grants to states?

Accepted Answer

Supporters of large grants see state gov...

Question 6

The more inelastic the demand for a product, the larger the share of the tax that will be paid by consumers.

Accepted Answer

A) True 
 B)False

Question 7

A congress member concerned about ensuring vertical equity in taxation would be most likely to argue for obtaining government revenue through a

Accepted Answer

A)  progressive tax on personal income.
B)  regressive tax on corporate income.
C)  sales tax.
D)  head tax.E) A) and C)
F) B) and D)

Question 8

Cities and towns mainly rely for revenue on

Accepted Answer

A)  property taxes.
B)  income taxes.
C)  excise taxes.
D)  payroll taxes.E) All of the above
F) A) and B)

Question 9

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) A) and D)
F) C) and D)

Question 10

The share of GDP going to federal taxes

Accepted Answer

A)  has been about 16 to 20 percent for the past 40 years.
B)  has been about 35 percent for the past 40 years.
C)  was about 40 percent until the early 1980s and has dropped greatly since then.
D)  has risen steadily in the past 40 years to about 35 percent.E) B) and D)
F) B) and C)

Question 11

Which of the following is most consistent with the benefits principle?

Accepted Answer

A)  Charging taxes to the people who use the funded services
B)  Taxes that account for a person's ability to pay
C)  Excise taxes on imported aluminum
D)  Sales taxes on cigarettesE) A) and B)
F) A) and C)

Question 12

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) A) and D)
F) A) and C)

Question 13

The benefits principle states that those who

Accepted Answer

A)  pay the taxes should reap the benefits.
B)  reap the benefits from government should pay the taxes.
C)  are best able to pay should pay for what they receive.
D)  pay taxes get the benefits they deserve.E) A) and B)
F) C) and D)

Question 14

Americans generally pay

Accepted Answer

A)  a lower percentage of their incomes in taxes than citizens of other industrialized countries.
B)  a lower percentage of their incomes in taxes than citizens of other industrialized countries, with the exceptions of Sweden and the Netherlands.
C)  about the same percentage of their incomes in taxes as citizens of other industrialized countries.
D)  a higher percentage of their incomes in taxes than citizens of other industrialized countries.E) C) and D)
F) None of the above

Question 15

No tax can lead the economy to higher levels of efficiency.

Accepted Answer

A) True 
 B)False

Question 16

The marginal tax rate is the change in the average tax rate as income increases.

Accepted Answer

A) True 
 B)False

Question 17

A tax loophole is

Accepted Answer

A)  an illegal method by which individuals or corporations avoid paying the taxes they legally owe.
B)  a provision in the tax code that allows individuals or corporations to reduce their tax burdens legally by meeting certain conditions.
C)  a tax surcharge on incomes within certain ranges.
D)  a provision in the tax code that allows individuals or corporations to shift the economic incidence of a particular tax on to someone else.E) A) and B)
F) C) and D)

Question 18

Vertical equity in income taxation refers to the notion that persons with different levels of income should be taxed differently.

Accepted Answer

A) True 
 B)False

Question 19

Corporate taxes are a direct tax.

Accepted Answer

A) True 
 B)False

Question 20

State and local governments typically spend most of their budgets on providing

Accepted Answer

A)  education.
B)  public goods.
C)  public welfare programs.
D)  police protection and administrative services.E) A) and B)
F) None of the above

Exam 17: Taxation and Resource Allocation

The most important indirect taxes in the United States are

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Corporate taxes are a direct tax.

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The share of GDP going to federal taxes

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Americans generally pay

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No tax can lead the economy to higher levels of efficiency.

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State and local governments typically spend most of their budgets on providing

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A tax loophole is

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What are the arguments for and against federal government grants to states?

Correct AnswerverifiedSupporters of large grants see state gov...View AnswerShow Answer

Cities and towns mainly rely for revenue on

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A congress member concerned about ensuring vertical equity in taxation would be most likely to argue for obtaining government revenue through a

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The United States Social Security system

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The marginal tax rate is the change in the average tax rate as income increases.

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Vertical equity in income taxation refers to the notion that persons with different levels of income should be taxed differently.

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The money for Social Security payments to current retirees comes from

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Which of the following is most consistent with the benefits principle?

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The benefits principle states that those who

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Are property taxes progressive or regressive?

Correct AnswerverifiedThe nature of property taxes is controve...View AnswerShow Answer

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

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Which of the following is not true for the U.S.payroll tax?

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The more inelastic the demand for a product, the larger the share of the tax that will be paid by consumers.

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Supporters of large grants see state gov...
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The nature of property taxes is controve...
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