Question 1

A tax where wealthy people pay a larger percentage of their income than poor people is known as a(n):

Accepted Answer

A progressive tax is one where the rate of taxation increases as the taxpayer's income increases. This means that the wealthy pay a larger percentage of their income than the poor, which is intended to create a more equitable distribution of the tax burden.

Question 2

A tax is structured so that the tax as a percentage of income declines as the level of income increases is called a(n):

Accepted Answer

The answer of A tax is structured so that the...

Question 3

Which of the following statements is true ?

Accepted Answer

All the statements are true: A) Personal income taxes are a major revenue source for the federal government. B) State governments rely heavily on sales and property taxes. C) Local governments primarily depend on property taxes. D) The U.S. generally has a lower tax burden compared to other advanced countries.

Question 4

Exhibit 12-4 Marginal tax rate lines  In Exhibit 12-4, line C represents a(n):

Accepted Answer

The answer of Exhibit 12-4 Marginal tax rate lines ...

Question 5

Jan has an income of $30,000 and pays $4,500 in taxes. When Jan's income rises to $40,000, her tax bill rises to $6,500. What is Jan's marginal tax rate?

Accepted Answer

The answer of Jan has an income of $30,000 and...

Question 6

Sales and excise taxes are:

Accepted Answer

Sales and excise taxes are typically regressive because they place a larger burden on low-income individuals who spend a higher proportion of their income on taxable goods and services.

Question 7

Exhibit 12-4 Marginal tax rate lines  In Exhibit 12-4, line B represents a:

Accepted Answer

The answer of Exhibit 12-4 Marginal tax rate lines ...

Question 8

Exhibit 12-4 Marginal tax rate lines  In Exhibit 12-4, line A represents a(n):

Accepted Answer

The answer of Exhibit 12-4 Marginal tax rate lines ...

Question 9

Jose pays a tax of $24,000 on his income of $60,000, while Richard pays a tax of $3,000 on his income of $30,000. This tax is:

Accepted Answer

The tax system is progressive because as the income increases, the tax rate increases as well. In this case, Jose has a higher income than Richard and pays a higher tax amount, indicating a higher tax rate percentage for him.

Question 10

A tax for which the rate varies directly with the income of the person taxed is known as a(n):

Accepted Answer

A tax that varies directly with income is known as a progressive tax. This means that the higher a person's income, the higher the rate of tax they pay. This type of tax system is designed to be more equitable, as those with higher incomes are seen as having a greater ability to pay taxes.

Question 11

Which of the following U.S. taxes is the most consistent with the ability-to-pay principle?

Accepted Answer

The ability-to-pay principle suggests that those who have a higher income and ability to pay should contribute a larger portion of their income. The federal income tax is a progressive tax, meaning that those with higher incomes pay a higher percentage of their income in taxes compared to those with lower incomes. This makes it the most consistent with the ability-to-pay principle compared to the other options.

Question 12

Which of the following statements is true ?

Accepted Answer

The answer of Which of the following statements is true...

Question 13

Which of the following can be classified as a regressive tax?

Accepted Answer

A regressive tax is a tax that takes a larger percentage of income from low-income earners than from high-income earners. Excise taxes, sales taxes, and gasoline taxes are all regressive taxes because they take a larger percentage of income from low-income earners than from high-income earners.

Question 14

A progressive tax means the percentage of income paid as taxes:

Accepted Answer

A progressive tax is a tax in which the tax rate increases as the taxable income increases.

Question 15

Consider two people, Sandy Smith, who earns $25,000, and Gary Carver, who earns $50,000. If the government has decided to tax everyone's first $25,000 at 20 percent and everyone's second $25,000 at 40 percent, then Gary pays:

Accepted Answer

The answer of Consider two people, Sandy Smith, who earns...

Question 16

Consider two people, Sandy Smith, who earns $25,000, and Gary Carver, who earns $50,000. If the government has decided to tax everyone's first $25,000 at 20 percent and everyone's second $25,000 at 40 percent, then:

Accepted Answer

The answer of Consider two people, Sandy Smith, who earns...

Question 17

Exhibit 12-4 Marginal tax rate lines  In Exhibit 12-4, if A represents state and local taxes and B represents federal income taxes, what is the result of imposing both types of taxes?

Accepted Answer

The answer of Exhibit 12-4 Marginal tax rate lines ...

Question 18

Which of the following statements is true ?

Accepted Answer

All the statements are true: Sales, excise, and flat-rate taxes can disproportionately affect the poor, rational ignorance can lead to government failure, and special-interest groups can exert undue influence on government decisions.

Question 19

Suppose a person with an income of $20,000 pays a tax of $2,000. If the tax is progressive, then how large of a tax will a person with an income of $40,000 pay?

Accepted Answer

The answer of Suppose a person with an income of...

Question 20

Some cities finance their airports with a departure tax: every person leaving the city by plane is charged a small fixed dollar amount that is used to help pay for building and running the airport. The departure tax follows the:

Accepted Answer

The departure tax follows the benefits-received principle, as those who are using the airport and its services are directly benefiting from it and should therefore contribute to its financing.

Quiz 12: The Public Sector

A tax where wealthy people pay a larger percentage of their income than poor people is known as a(n) :

A tax is structured so that the tax as a percentage of income declines as the level of income increases is called a(n) :

Which of the following statements is true ?

Exhibit 12-4 Marginal tax rate lines In Exhibit 12-4, line C represents a(n) :

Jan has an income of $30,000 and pays $4,500 in taxes. When Jan's income rises to $40,000, her tax bill rises to $6,500. What is Jan's marginal tax rate?

Sales and excise taxes are:

Exhibit 12-4 Marginal tax rate lines In Exhibit 12-4, line B represents a:

Exhibit 12-4 Marginal tax rate lines In Exhibit 12-4, line A represents a(n) :

Jose pays a tax of $24,000 on his income of $60,000, while Richard pays a tax of $3,000 on his income of $30,000. This tax is:

A tax for which the rate varies directly with the income of the person taxed is known as a(n) :

Which of the following U.S. taxes is the most consistent with the ability-to-pay principle?

Which of the following statements is true ?

Which of the following can be classified as a regressive tax?

A progressive tax means the percentage of income paid as taxes:

Consider two people, Sandy Smith, who earns $25,000, and Gary Carver, who earns $50,000. If the government has decided to tax everyone's first $25,000 at 20 percent and everyone's second $25,000 at 40 percent, then Gary pays:

Consider two people, Sandy Smith, who earns $25,000, and Gary Carver, who earns $50,000. If the government has decided to tax everyone's first $25,000 at 20 percent and everyone's second $25,000 at 40 percent, then:

Exhibit 12-4 Marginal tax rate lines In Exhibit 12-4, if A represents state and local taxes and B represents federal income taxes, what is the result of imposing both types of taxes?

Which of the following statements is true ?

Suppose a person with an income of $20,000 pays a tax of $2,000. If the tax is progressive, then how large of a tax will a person with an income of $40,000 pay?

Some cities finance their airports with a departure tax: every person leaving the city by plane is charged a small fixed dollar amount that is used to help pay for building and running the airport. The departure tax follows the: