Deck 11: Tax Policy

Question 1

Estate taxes are taxes on

A) large homes worth over $750,000.
B) holdings of land over 5,000 acres.
C) property left to heirs upon your death.
D) profits from e-commerce paid to state governments.

Answer 1

C

Question 2

Under George W.Bush,

A) the "marriage penalty" tax went up, but taxes on stock dividends were lowered.
B) the "marriage penalty" was eliminated, but taxes on dividends went up.
C) the "marriage penalty" was eliminated, and the stock dividend tax went down.
D) the "marriage penalty" tax went down, but the taxes on stock dividends went up.

Answer 2

C

Question 3

A general issue in tax policy is universality, which means that

A) everyone pays their fair share of the property tax.
B) everyone (the universe of tax payers) pays something.
C) all types of income should be taxed at the same rate.
D) all income (above $50,000) should be taxed at the same rate.

Answer 3

C

Question 4

Under a flat tax

A) all tax breaks would be eliminated, and everyone would pay a flat tax of about 9 percent on income.
B) some tax breaks would remain, and everyone would pay a flat tax of about 19 percent on income.
C) some tax breaks would remain, and everyone would pay a flat tax of 9 percent.
D) all tax breaks would be eliminated, and everyone would pay a flat tax of about 19 percent.

Question 5

An income tax system that takes the same percentage of tax for all income levels is

A) regressive.
B) progressive.
C) proportional.
D) highly regressive.

Question 6

The capital gains tax is controversial because it

A) is regressive.
B) progressive.
C) proportional.
D) lower than income taxes.

Question 7

If you made a profit on the sale of a home or stock, you might have to pay a tax.

A) property
B) capital gains
C) windfall or marriage penalty
D) excise

Question 8

The idea of a national sales tax would

A) encourage people to borrow to buy goods.
B) reduce the cost of tax collections.
C) be very good for people wishing to buy high-value property (large homes or expensive cars).
D) encourage consumption rather than saving.

Question 9

The lower 50 percent of income tax payers collectively pay about how much of the nation's tax bill?

A) 1 percent
B) 3 percent
C) 14 percent
D) 50 percent

Question 10

The greatest barrier to simplification of the tax code come from

A) Congress.
B) the Supreme Court.
C) the Federal Reserve Board.
D) interest groups.

Question 11

Corporate income tax provides about income.

A) 5 percent
B) 10 percent
C) 15 percent
D) 25 percent

Question 12

Maximum income tax rates

A) went up during the Reagan administration.
B) went up during the Kennedy administration.
C) went down during the George H. W. Bush administration.
D) went up during the Clinton administration.

Question 13

Pluralism would most likely be associated with

A) public-choice theory.
B) systems analysis.
C) interest-group theory.
D) legal analysis.

Question 14

President Reagan's Tax Reform Act of 1986 traded lower tax rates for

A) a flat tax.
B) higher estate taxes.
C) higher excise taxes.
D) fewer tax breaks.

Question 15

The federal income tax is

A) regressive.
B) proportional.
C) progressive.
D) subjective.

Question 16

The Laffer Curve concerns the relationship between

A) taxes and productivity.
B) regressive and progressive tax systems.
C) sales and income tax systems.
D) economic recovery and the flat tax.

Question 17

A flat tax is also

A) an excise tax.
B) proportional.
C) regressive.
D) progressive

Question 18

The top source of income for the federal government is the

A) corporate income tax.
B) individual income tax.
C) Social Security tax.
D) joint tax.

Question 19

George W.Bush moved to

A) lower the top marginal tax rate.
B) raise the top marginal tax rate.
C) raise the top marginal rate but lower the capital gains tax.
D) lower the top marginal rate and lower the capital gains tax.

Question 20

A national sales tax is likely to be

A) regressive.
B) proportional.
C) progressive.
D) subjective.

Question 21

Capital gains are currently taxed at a lower rate than wage income.

Question 22

The provisions of the tax package passed in 2010 will expire in 2012.

Question 23

Since different kinds of income are taxed at different rates, our system is not universal.

Question 24

According to the Laffer Curve, higher taxes result in economic decline.

Question 25

The Tax Reform Act of 1986 sharply reduced taxes in the upper bracket.

Question 26

Social Security is paid for as an income tax deduction.

Question 27

The income tax system was introduce by means of a constitutional amendment.

Question 28

More than half of personal income is not taxed.

Question 29

A sales tax would likely encourage savings and discourage spending.

Question 30

Our current tax system is proportional.