1. If an affluent households pay less tax, as a percentage of income, than low-i

Question

1.

If an affluent households pay less tax, as a percentage of income, than low-income households, this tax is categorized as

Select one:

a. Progressive

b. Proportional

c. Regressive

2.

If the percentage of income paid in tax (tax rate) rises, as income rises, this rate is called

Select one:

a. Progressive

b. Proportional

c. Regressive

3.

Taxes such as hunting and fishing licenses, paying tolls to drive on controlled public roads, and an excise tax of 7.5% added to the cost of an airplane ticket, are all examples of the

Select one:

a. Ability to Pay Principle

b. Benefits Received Principle

c. No Taxation without Representation Principle

d. Neutrality of Tax Principle

4.

The so called "flat tax" would apply which kind of taxes to tax-payers?

Select one:

a. Progressive

b. Proportional

c. Regressive

5.

Suppose Kaitlyn must pay taxes on $50,000 of income. She is able to deduct $15,000, reducing her taxable income to $35,000. She is then liable for $4796 in tax. That is 9.6% of her gross income. Kaitlyn paid 15% on the last dollar she earned. Which statement is correct?

Select one:

a. The flat tax rate is 12.3%

b. The effective (average) tax rate is 12.3%

c. The effective (average) tax rate is 15%

d. The marginal tax rate is 9.6%

e. The marginal tax rate is 15%.

6.

Which is a true statement? (Refer to Ch3 McEachern)

Select one:

a. Corporate tax rates have risen in the USA since 1960.

b. Individual income tax rates have doubled in the USA since 1960.

c. Income tax rates have increased sharply and corporate tax rates have fallen in the USA since 1960.

d. Corporate tax rates have fallen and payroll tax rates have risen in the USA since 1960.

7.

True or False? If one earned $406,750 and fell into the 39.6% rate on taxable income, then one paid $161,073 (39.6% x $406,750) in tax.

Select one:

a. True

b. False

Explanation / Answer

1 c. Regressive

2 a. Progressive

3b. Benefits Received Principle

4 b. Proportiona

5 e. The marginal tax rate is 15%

6 c. Income tax rates have increased sharply and corporate tax rates have fallen in the USA since 1960

7 b. False

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