Question 1

A tax that takes a higher percentage of income as income rises is called a(n)

Accepted Answer

A progressive tax takes a higher percentage of income as income rises, while a proportional tax takes the same percentage of income regardless of income level, and a regressive tax takes a higher percentage of income from lower-income earners. Excise taxes are taxes on specific goods or services, and a value-added tax is a type of consumption tax. Therefore, the only option that fits the description is a progressive tax, which takes a higher percentage of income as income rises.

Question 2

An income tax is progressive if,as income increases,

Accepted Answer

In a progressive tax system, the average tax rate increases as income increases, meaning higher income earners pay a larger percentage of their income in taxes compared to lower income earners.

Question 3

FIGURE 18-1
-Refer to Figure 18-1.A progressive tax is illustrated by curve(s)

Accepted Answer

D

Question 4

A tax that takes a smaller percentage of income as the income increases is called

Accepted Answer

A regressive tax is one where the tax rate decreases as the income increases, meaning it takes a smaller percentage of income as income rises.

Question 5

FIGURE 18-1
-Refer to Figure 18-1.A lump-sum tax is illustrated by curve(s)

Accepted Answer

A lump-sum tax is a fixed amount of tax that does not change with income or output, which is typically represented by a horizontal line on a graph, like curve D.

Question 6

Suppose taxes are levied in the following way.No individual pays any taxes on the first $10 000 of their income.And for every dollar earned above this amount,all individuals pay 20% in taxes.This income-tax system is

Accepted Answer

The answer of Suppose taxes are levied in the following...

Question 7

Suppose an income tax is levied in the following way: All individuals pay 10% of their income up to an income of $30 000.On all income above $30 000,individuals pay 20% of their income.Such a tax is

Accepted Answer

This tax is progressive because individuals with higher incomes pay a higher percentage of their income in taxes compared to those with lower incomes. The tax rate increases after a certain threshold (income of $30,000) which targets higher earners.

Question 8

Tax and other revenues collected by all levels of government amounted to approximately what proportion of Canada's Gross Domestic Product (GDP)in 2014?

Accepted Answer

In 2014, the total tax and other revenues collected by all levels of government in Canada were approximately 38% of the country's GDP.

Question 9

An example of a regressive tax in Canada is

Accepted Answer

Provincial sales taxes are considered regressive because they apply to all individuals, regardless of their income level. This means that low-income individuals end up paying a larger percentage of their income in taxes compared to high-income individuals.

Question 10

The sometimes proposed "flat tax," such as one that takes 15% of income at all levels of income,is an example of a(n)

Accepted Answer

A flat tax is a proportional tax, meaning that everyone pays the same percentage of their income regardless of how much they make.

Question 11

A marginal tax rate of 47% on taxable income over $150 000 implies that

Accepted Answer

A marginal tax rate of 47% means that for every additional dollar earned over $150,000, 47 cents is paid in tax.

Question 12

Suppose taxes are levied in the following way.All individuals pay a tax equal to $2000 no matter what income they earn.In addition,all individuals pay 20% of all their earned income in taxes.This income-tax system is

Accepted Answer

The tax system described is regressive because it takes a larger proportion of income from those who earn less. The $2000 flat tax represents a larger percentage of the income of lower earners than higher earners, and the 20% tax on earnings means that as income increases, the proportion of income paid in taxes decreases.

Question 13

If a tax system contains some important taxes that are regressive,substantial progressivity in other taxes would be required in order to achieve

Accepted Answer

The answer of If a tax system contains some important...

Question 14

Consider an income-tax system that requires all individuals to pay exactly 3% of their income.This income-tax system is

Accepted Answer

A proportional tax system imposes the same percentage tax rate on all individuals, regardless of their income levels. In this case, everyone pays exactly 3% of their income, making it a proportional system. It is not progressive since the tax rate does not increase with higher incomes, nor is it regressive since a fixed percentage of income is paid by all taxpayers.

Question 15

Some important taxes are regressive,such as provincial sales taxes.In an effort to achieve proportionality in the overall tax system it is therefore necessary to impose

Accepted Answer

Since provincial sales taxes are regressive, which means the burden falls more heavily on low-income earners than high-income earners, it is necessary to have substantial progressivity in income taxes. By doing so, the tax burden can be more equitably distributed, and individuals with higher incomes contribute a larger share of their income to the overall tax system. This can help achieve proportionality in the tax system.

Question 16

A mandatory health-insurance premium of a given amount payable by all residents is an example of a(n)

Accepted Answer

The answer of A mandatory health-insurance premium of a given...

Question 17

FIGURE 18-1
-Refer to Figure 18-1.A proportional tax is illustrated by curve(s)

Accepted Answer

A proportional tax means that the tax rate remains constant regardless of income level. In the graph, the only curve that represents a constant tax rate is curve B, as it is a straight line. Curves A, C, and D all represent a progressive tax system, where the tax rate increases with income level. Therefore, the only curve that illustrates a proportional tax is curve B.

Question 18

Which of the following statements suggests that property taxes might be progressive?

Accepted Answer

Higher-income people living in more expensive houses suggests that they pay more in property taxes, which could make the tax system progressive as it takes a larger absolute amount from those with higher incomes.

Question 19

Which of the following is required to achieve progressivity for a particular tax?

Accepted Answer

In order to achieve progressivity, the marginal tax rate must be greater than the average tax rate, implying that the average tax rate is rising with income. This means that as a person's income increases, the percentage of their income that is paid in taxes also increases.

Question 20

FIGURE 18-1
-Refer to Figure 18-1.A regressive tax is illustrated by curve(s)

Accepted Answer

The answer of  FIGURE 18-1
-Refer to Figure 18-1.A regressive...

Quiz 18: Taxation and Public Expenditure