Deck 5: Budgeting for Revenues: Income Taxes, Payroll Taxes, and Property Taxes

Question 1

If effective tax rates are higher for higher-income taxpayers than for lower-income taxpayers, then the tax has what kind of rate structure?

A) Proportional
B) Regressive
C) Progressive
D) Relational

Answer 1

C

Question 2

According to a 2016 CBO study, what was the effective tax rate of the top 1% of households in 2016?

A) 40%
B) 33%
C) 28%
D) 16%

Answer 2

B

Question 3

In terms of the principle of taxation that considers the cost of administration, for which of the following is the cost of enforcement greater than the cost to the government to collect the tax?

A) Sales tax
B) Property tax
C) Payroll tax
D) Income tax

Answer 3

D

Question 4

The federal definition of income for tax purposes includes all of the following, except:

A) workers compensation.
B) dividends.
C) alimony.
D) unemployment insurance.

Question 5

The federal income tax has how many different tax brackets?

A) 8
B) 6
C) 4
D) 7

Question 6

What feature of the federal income tax system is known as a "shadow tax"?

A) The earned income tax credit
B) The flat individual income tax
C) The alternative minimum tax
D) The payroll tax

Question 7

Property tax relief measures that limit taxes, usually for low-income elderly persons, are known as:

A) efficient.
B) proportional.
C) market assessments.
D) circuit breakers.

Question 8

In general, all public sector revenue sources have the same potential for growth.

Question 9

The payroll tax for Social Security and Medicare is a form of progressive taxation.

Question 10

The earned income tax credit can be considered a negative income tax.

Question 11

Corporate income taxes apply only to a firm's net profit after operating expenses.

Question 12

Like Medicare, Social Security is funded by the federal payroll tax.

Question 13

The original motivations behind taxpayers' revolts were both the sharp rise in property values and a generally negative attitude that government officials have an insatiable appetite for spending.

Question 14

What tax is the one most reviled by taxpayers because it is regarded as the most unfair yet is the single most important for funding local services and public education?

Question 15

What are the five major considerations given to adopting a revenue source, known as the principles of taxation?

Question 16

What are the two fundamental doctrines of tax equity?

Question 17

Briefly explain the difference between horizontal and vertical tax equity.

Question 18

What is the definition of income used by economists, for the purpose of determining a broad tax base?

Question 19

Itemized deductions attempt to adjust taxable income to reflect differences in individual taxpayer conditions. What are some of the most common deductions?

Question 20

What is the base of the real property tax?

Question 21

How do local governments often determine the annual property tax rate?

Question 22

Explore the concept of tax equity. In that context, what do governments need to consider in devising a tax system? Given those considerations, what do governments in the United States choose to tax and why?