Question 1

In England the Thatcher government substituted a "poll tax" for the local property tax.People took strong exception to the tax, which is basically a head or "lump sum" tax.The principle of taxation such a tax violates is called

Accepted Answer

A)  the benefits principle.
B)  the excess burden principle.
C)  the ability-to-pay principle.
D)  the constitutional principle.E) A) and C)
F) A) and D)

Question 2

For about the last 45 years, federal taxes have remained relatively constant as a percentage of GDP.

Accepted Answer

A) True 
 B)False

Question 3

The corporate income tax is

Accepted Answer

A)  a tax on corporate profit, not revenue.
B)  the single largest source of federal revenue.
C)  a payroll tax paid partially by employees and partially by employers.
D)  has increased as a proportion of federal tax revenue since 1950.E) A) and D)
F) A) and C)

Question 4

Loopholes reduce the efficiency of the tax system.

Accepted Answer

A) True 
 B)False

Question 5

When a tax is imposed on an item, it can generally be said that the incidence of the tax is

Accepted Answer

A)  entirely on the buyer.
B)  entirely on the seller.
C)  on both the buyer and seller.
D)  not determined in this manner.E) B) and C)
F) A) and D)

Question 6

On necessities, more of the incidence of tax is

Accepted Answer

A)  borne by the producer.
B)  borne by the consumer.
C)  shared equally between the producer and the consumer.
D)  None of the above is correct.E) B) and D)
F) A) and C)

Question 7

An excess burden is present when taxpayers alter their behavior on account of taxation.

Accepted Answer

A) True 
 B)False

Question 8

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) B) and C)
F) All of the above

Question 9

Mrs.Dodge has $8 million in income and pays no income taxes.Her income is most likely

Accepted Answer

A)  capital gains.
B)  interest on corporate bonds.
C)  interest on municipal bonds.
D)  offset by mortgage interest.E) A) and B)
F) B) and C)

Question 10

Tax loopholes

Accepted Answer

A)  reduce the progressivity of the federal income tax.
B)  encourage particular patterns of behavior.
C)  include exemption of interest earned on municipal bonds.
D)  All of the above are correct.E) B) and D)
F) A) and B)

Question 11

What is the controversy surrounding property taxes as a source for school funding?

Accepted Answer

The controversy behind school funding ap...

Question 12

The second largest source of revenue for the federal government is the

Accepted Answer

A)  import tax.
B)  payroll tax.
C)  export tax.
D)  federal property tax.E) B) and D)
F) B) and C)

Question 13

Horizontal equity is the concept that

Accepted Answer

A)  equally situated individuals should be taxed equally.
B)  persons with the same income should be taxed equally.
C)  equal property value should be taxed equally.
D)  persons living in the same neighborhood should be taxed equally.E) A) and B)
F) None of the above

Question 14

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) All of the above
F) C) and D)

Question 15

The people most likely to pay little personal income tax to the U.S.government are

Accepted Answer

A)  the middle class.
B)  renters.
C)  the very poor.
D)  earners of wages (as opposed to salaries) .E) B) and D)
F) A) and B)

Question 16

The corporate income tax is

Accepted Answer

A)  an indirect tax.
B)  a regressive tax.
C)  the second largest source of revenue for the federal government.
D)  a direct tax.E) A) and D)
F) None of the above

Question 17

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

Accepted Answer

Supporters of large grants see state gov...

Question 18

The head tax is regressive.

Accepted Answer

A) True 
 B)False

Question 19

The ability-to-pay principle is most closely tied to the concept of

Accepted Answer

A)  horizontal equity in taxation.
B)  fiscal federalism.
C)  vertical equity in taxation.
D)  the benefits principle of tax equity.E) A) and B)
F) B) and C)

Question 20

Cities and towns mainly rely for revenue on

Accepted Answer

A)  property taxes.
B)  income taxes.
C)  excise taxes.
D)  payroll taxes.E) A) and B)
F) None of the above

Exam 17: Taxation and Resource Allocation

What is the controversy surrounding property taxes as a source for school funding?

Correct AnswerverifiedThe controversy behind school funding ap...View AnswerShow Answer

The second largest source of revenue for the federal government is the

Correct AnswerverifiedShow Answer

For about the last 45 years, federal taxes have remained relatively constant as a percentage of GDP.

Correct AnswerverifiedShow Answer

Mrs.Dodge has $8 million in income and pays no income taxes.Her income is most likely

Correct AnswerverifiedShow Answer

In England the Thatcher government substituted a "poll tax" for the local property tax.People took strong exception to the tax, which is basically a head or "lump sum" tax.The principle of taxation such a tax violates is called

Correct AnswerverifiedShow Answer

The corporate income tax is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Horizontal equity is the concept that

Correct AnswerverifiedShow Answer

Loopholes reduce the efficiency of the tax system.

Correct AnswerverifiedShow Answer

The head tax is regressive.

Correct AnswerverifiedShow Answer

The people most likely to pay little personal income tax to the U.S.government are

Correct AnswerverifiedShow Answer

Cities and towns mainly rely for revenue on

Correct AnswerverifiedShow Answer

The ability-to-pay principle is most closely tied to the concept of

Correct AnswerverifiedShow Answer

An excess burden is present when taxpayers alter their behavior on account of taxation.

Correct AnswerverifiedShow Answer

On necessities, more of the incidence of tax is

Correct AnswerverifiedShow Answer

The money for Social Security payments to current retirees comes from

Correct AnswerverifiedShow Answer

When a tax is imposed on an item, it can generally be said that the incidence of the tax is

Correct AnswerverifiedShow Answer

The corporate income tax is

Correct AnswerverifiedShow Answer

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

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

Tax loopholes

Correct AnswerverifiedShow Answer

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The controversy behind school funding ap...
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Supporters of large grants see state gov...
View Answer

Correct Answer
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