Question 1

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

A

Question 2

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

Accepted Answer

To achieve progressivity, the marginal tax rate must be higher than the average tax rate. This means that as a person's income increases, they will pay a higher percentage of their income in taxes. This results in a more equitable distribution of the tax burden among individuals with different levels of income.

Question 3

The tax that generates the greatest proportion of government revenue in Canada is

Accepted Answer

The income tax generates the greatest proportion of government revenue in Canada, accounting for approximately 50% of all federal and provincial revenue. The goods and services tax (B) and provincial sales tax (D) generate revenue on consumption but are not as significant as the income tax. The property tax (C) is a municipal tax and does not generate as much revenue as the income tax. The payroll tax (E) is a specific tax on employment income and is included in the overall income tax revenue.

Question 4

An income tax is progressive if,as income increases,

Accepted Answer

The answer of An income tax is progressive if,as income...

Question 5

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. This is based on the belief that those who have higher incomes can afford to contribute more to society through taxes. Proportional taxes take the same percentage of income regardless of income level, while regressive taxes take a higher percentage of income from those with lower incomes. Excise taxes are taxes on specific goods or services, and value-added taxes are taxes on the value added at each stage of production in the creation of a good or service.

Question 6

An example of a regressive tax in Canada is

Accepted Answer

Regressive taxes are taxes that have a greater impact on low-income individuals than on high-income individuals. Provincial sales taxes are an example of a regressive tax because they are applied at a flat rate and do not take into account a person's income. This means that someone earning a lower income will be paying a higher percentage of their income in taxes compared to someone with a higher income.

Question 7

As a proportion of Gross Domestic Product (GDP),Canadian governmentsʹ tax revenues,as compared to other industrialized countries,are

Accepted Answer

Canadian governments' tax revenues as a proportion of GDP are roughly in the middle of the group when compared to other industrialized countries. This indicates that Canada's tax revenue is neither exceptionally high nor exceptionally low relative to its GDP, compared to other industrialized nations.

Question 8

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 9

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

To achieve proportionality and offset regressive taxes, substantial progressivity in income taxes is necessary. Progressive income taxes ensure that those who earn more income, pay a higher percentage in taxes, while those who earn less income are taxed at a lower rate. This helps to redistribute income and offset the regressive effects of taxes like provincial sales tax.

Question 10

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

Accepted Answer

A mandatory health-insurance premium is a regressive tax because it takes a larger percentage of income from low-income individuals compared to high-income individuals. The amount payable is the same for all residents, regardless of their income level, making it regressive in nature.

Question 11

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 requires all individuals to pay the same percentage of their income, regardless of their income level. In this case, everyone pays exactly 3%, making it a proportional tax.

Question 12

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 as income increases, the percentage of income paid in taxes also increases. Those with higher incomes will pay a higher percentage of their income in taxes compared to those with lower incomes.

Question 13

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

Accepted Answer

The answer of A marginal tax rate of 47% on...

Question 14

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

This income-tax system is progressive because as an individual's income increases, the percentage of their income paid in taxes also increases. This means that high-income earners will pay a higher percentage of their income in taxes compared to low-income earners.

Question 15

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

Accepted Answer

Higher-income individuals generally live in more expensive houses, which means they would pay more in property taxes if the tax rate is consistent across property values. This can make the tax system progressive, as those with higher incomes contribute a larger amount.

Question 16

In Canada,taxes are levied and collected by

Accepted Answer

In Canada, taxes are levied and collected by all levels of government: the federal government, provincial governments, and local governments. Each level of government has its own taxation powers and responsibilities, covering a range of taxes such as income tax, sales tax, property tax, and more.

Question 17

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

Accepted Answer

A regressive tax takes a smaller percentage of income as the income increases, which means it places a higher burden on those with lower incomes relative to those with higher incomes.

Question 18

In 2015, the federal income-tax rate was graduated in ________ steps, with the top rate applying to incomes above approximately ________.

Accepted Answer

The question is asking about the federal income-tax rate and the number of steps in the graduated tax system. Option E is the only choice that mentions four steps, which is correct. The second part of the question asks about the income threshold for the top tax rate. Option E mentions $138,000, which is correct. Therefore, the correct answer is E.

Question 19

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

Accepted Answer

A flat tax, which takes the same percentage of income regardless of the level of income, is an example of a proportional tax. This is because each person pays the same proportion of their income in taxes, regardless of whether they are rich or poor.

Question 20

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

Accepted Answer

The answer of Tax and other revenues collected by all...

Quiz 18: Taxation and Public Expenditure