Question 1

Of all the taxes collected in the U.S. economy, what percentage is collected by the federal government?

Accepted Answer

The answer of Of all the taxes collected in the...

Question 2

Which of the following statements is correct?

Accepted Answer

A)   Vertical equity is the idea that taxpayers with similar abilities to pay taxes should pay the same amount.
B)   Horizontal equity is the idea that taxes should be levied on a person according to how well that person can shoulder the burden.
C)   A regressive tax would mean that high-income tax payers pay a larger fraction of their income in taxes than would low-income taxpayers.
D)   A proportional tax would mean that high-income and low-income taxpayers pay the same fraction of income in taxes.E) All of the above
F) A) and D)

Question 3

Citizens expect the government to provide various goods and services making taxes

Accepted Answer

A)   inefficient.
B)   equitable.
C)   inevitable.
D)   intolerable.E) A) and B)
F) None of the above

Question 4

Vertical equity and horizontal equity are associated with

Accepted Answer

A)   the benefits principle of taxation.
B)   the ability-to-pay principle of taxation.
C)   taxes that have no deadweight losses.
D)   falling marginal tax rates.E) A) and B)
F) All of the above

Question 5

Table 12-4 
-Refer to Table 12-4. What is the marginal tax rate for a person who makes $130,000?

Accepted Answer

A)   30%
B)   40%
C)   50%
D)   60%E) A) and D)
F) A) and C)

Question 6

Table 12-2 
-Refer to Table 12-2. Suppose that the government imposes a $2 tax on delights, causing the price to increase from $4.00 to $6.00. Total consumer surplus will fall from

Accepted Answer

A)   $6 to $3.
B)   $7 to $4.
C)   $6 to $2.
D)   $5 to $3.E) A) and B)
F) B) and D)

Question 7

Individual income taxes generate roughly 25% of the tax revenue for the federal government.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not an administrative burden of our tax system?

Accepted Answer

A)   government resources used to enforce tax laws
B)   keeping tax records throughout the year
C)   paying the taxes owed
D)   time spent in April filling out formsE) B) and D)
F) A) and B)

Question 9

In 2010, the co­chairmen of President Obama's deficit reduction commission proposed curtailing or eliminating the mortgage interest deduction that millions of homeowner taxpayers receive every year. Economists who favor the proposal would argue that

Accepted Answer

A)   (i)  only
B)   (ii)  only
C)   (i)  and (ii)  only
D)   (i) , (ii) , and (iii) E) C) and D)
F) B) and D)

Question 10

In the United States, all families pay the same proportion of their income in taxes.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following countries has lower total government tax revenue as a percentage of GDP than the United States?

Accepted Answer

A)   Canada
B)   Germany
C)   Sweden
D)   MexicoE) A) and B)
F) A) and C)

Question 12

Suppose the government imposes a tax of 20 percent on the first $50,000 of income and 30 percent on all income above $50,000. What is the marginal tax rate when income is $60,000?

Accepted Answer

A)   10 percent
B)   20 percent
C)   30 percent
D)   50 percentE) B) and C)
F) None of the above

Question 13

In 2011, the largest source of receipts for state and local governments was corporate income taxes.

Accepted Answer

A) True 
 B)False

Question 14

Table 12-1 
-Refer to Table 12-1. Assume that the price of a weekend ski pass is $45 and that the price reflects the actual unit cost of providing a weekend of skiing. Suppose the government imposes a tax of $12 on skiing, which raises the price of a weekend ski pass to $57. What is the value of the surplus that accrues to all four skiers from their weekend trip?

Accepted Answer

A)   $41.
B)   $95.
C)   $144.
D)   $185.E) A) and D)
F) A) and C)

Question 15

Suppose that the government taxes income in the following fashion: 20 percent of the first $50,000, 40 percent of the next $50,000, and 60 percent of all income over $100,000. Marshall earns $200,000, and Lily earns $600,000. Which of the following statements is correct?

Accepted Answer

A)   Marshall's marginal tax rate is higher than Lily's marginal tax rate.
B)   Marshall's average tax rate is higher than his marginal tax rate.
C)   Lily's average tax rate is higher than her marginal tax rate.
D)   Lily's average tax rate is higher than Marshall's average tax rate.E) All of the above
F) C) and D)

Question 16

The tax that generates the most revenue for state and local government is the

Accepted Answer

A)   corporate income tax.
B)   individual income tax.
C)   property tax.
D)   sales tax.E) A) and B)
F) A) and C)

Question 17

In 2009, the top 1 percent of income earners made about

Accepted Answer

A)   1 percent of all income and paid about 1 percent of all taxes.
B)   13 percent of all income and paid about 22 percent of all taxes.
C)   22 percent of all income and paid about 13 percent of all taxes.
D)   50 percent of all income and paid about 50 percent of all taxes.E) A) and D)
F) None of the above

Question 18

Over the past 100 years, as the U.S. economy's income has grown,

Accepted Answer

A)   tax rates have decreased, while tax revenues have increased.
B)   tax rates have increased, while tax revenues have decreased.
C)   both tax rates and tax revenues have increased.
D)   both tax rates and tax revenues have decreased.E) All of the above
F) None of the above

Question 19

The U.S. tax burden is

Accepted Answer

A)   about the same as most European countries.
B)   higher than most European countries.
C)   lower than most European countries.
D)   higher than all European countries.E) A) and B)
F) B) and C)

Question 20

The largest budgetary expense for a typical state or local government is

Accepted Answer

A)   public order and safety.
B)   welfare.
C)   highways.
D)   education.E) C) and D)
F) A) and B)

Exam 12: The Design of the Tax System

Which of the following is not an administrative burden of our tax system?

Correct Answer
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Vertical equity and horizontal equity are associated with

Correct Answer
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Correct Answer
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Suppose the government imposes a tax of 20 percent on the first $50,000 of income and 30 percent on all income above $50,000. What is the marginal tax rate when income is $60,000?

Correct Answer
verified

The tax that generates the most revenue for state and local government is the

Correct Answer
verified

The U.S. tax burden is

Correct Answer
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Suppose that the government taxes income in the following fashion: 20 percent of the first $50,000, 40 percent of the next $50,000, and 60 percent of all income over $100,000. Marshall earns $200,000, and Lily earns $600,000. Which of the following statements is correct?

Correct Answer
verified

In the United States, all families pay the same proportion of their income in taxes.

Correct Answer
verified

In 2010, the cochairmen of President Obama's deficit reduction commission proposed curtailing or eliminating the mortgage interest deduction that millions of homeowner taxpayers receive every year. Economists who favor the proposal would argue that

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

Over the past 100 years, as the U.S. economy's income has grown,

Correct Answer
verified

Which of the following countries has lower total government tax revenue as a percentage of GDP than the United States?

Correct Answer
verified

Of all the taxes collected in the U.S. economy, what percentage is collected by the federal government?

Correct Answer
verified

The largest budgetary expense for a typical state or local government is

Correct Answer
verified

Individual income taxes generate roughly 25% of the tax revenue for the federal government.

Correct Answer
verified

Table 12-4 -Refer to Table 12-4. What is the marginal tax rate for a person who makes $130,000?

Correct Answer
verified

In 2011, the largest source of receipts for state and local governments was corporate income taxes.

Correct Answer
verified

In 2009, the top 1 percent of income earners made about

Correct Answer
verified

Citizens expect the government to provide various goods and services making taxes

Correct Answer
verified

Table 12-2 -Refer to Table 12-2. Suppose that the government imposes a $2 tax on delights, causing the price to increase from $4.00 to $6.00. Total consumer surplus will fall from

Correct Answer
verified

Exam 12: The Design of the Tax System

Which of the following is not an administrative burden of our tax system?

Correct AnswerverifiedShow Answer

Vertical equity and horizontal equity are associated with

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose the government imposes a tax of 20 percent on the first $50,000 of income and 30 percent on all income above $50,000. What is the marginal tax rate when income is $60,000?

Correct AnswerverifiedShow Answer

The tax that generates the most revenue for state and local government is the

Correct AnswerverifiedShow Answer

The U.S. tax burden is

Correct AnswerverifiedShow Answer

Suppose that the government taxes income in the following fashion: 20 percent of the first $50,000, 40 percent of the next $50,000, and 60 percent of all income over $100,000. Marshall earns $200,000, and Lily earns $600,000. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

In the United States, all families pay the same proportion of their income in taxes.

Correct AnswerverifiedShow Answer

In 2010, the co­chairmen of President Obama's deficit reduction commission proposed curtailing or eliminating the mortgage interest deduction that millions of homeowner taxpayers receive every year. Economists who favor the proposal would argue that

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Over the past 100 years, as the U.S. economy's income has grown,

Correct AnswerverifiedShow Answer

Which of the following countries has lower total government tax revenue as a percentage of GDP than the United States?

Correct AnswerverifiedShow Answer

Of all the taxes collected in the U.S. economy, what percentage is collected by the federal government?

Correct AnswerverifiedShow Answer

The largest budgetary expense for a typical state or local government is

Correct AnswerverifiedShow Answer

Individual income taxes generate roughly 25% of the tax revenue for the federal government.

Correct AnswerverifiedShow Answer

Table 12-4 -Refer to Table 12-4. What is the marginal tax rate for a person who makes $130,000?

Correct AnswerverifiedShow Answer

In 2011, the largest source of receipts for state and local governments was corporate income taxes.

Correct AnswerverifiedShow Answer

In 2009, the top 1 percent of income earners made about

Correct AnswerverifiedShow Answer

Citizens expect the government to provide various goods and services making taxes

Correct AnswerverifiedShow Answer

Table 12-2 -Refer to Table 12-2. Suppose that the government imposes a $2 tax on delights, causing the price to increase from $4.00 to $6.00. Total consumer surplus will fall from

Correct AnswerverifiedShow Answer

Correct Answer
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In 2010, the cochairmen of President Obama's deficit reduction commission proposed curtailing or eliminating the mortgage interest deduction that millions of homeowner taxpayers receive every year. Economists who favor the proposal would argue that

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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