Question 1

Sales taxes are criticized because they place a greater burden on those with lower incomes because everyone, regardless of their income, pays the same percentage.This type of tax is called

Accepted Answer

Sales taxes are considered regressive because they take a larger percentage of income from those with lower incomes. A flat percentage sales tax may seem fair, but it can be more difficult for those with lower incomes to afford the same goods and services as those with higher incomes. This is because a larger percentage of their income will go towards paying the tax.

Question 2

Property taxes

Accepted Answer

Property taxes are often seen as difficult to administer and somewhat arbitrary due to varying property assessments and valuation methods.

Question 3

The state that generates the largest portion of its budget from severance taxes is

Accepted Answer

B

Question 4

Sin taxes account for a small but growing percent of state revenues and refer to the taxes levied on items such as

Accepted Answer

Sin taxes refer to taxes on items that are deemed harmful or sinful, such as tobacco and alcohol. These taxes are often used to discourage the use of these products and raise revenue for the state. They do not typically apply to items like expensive automobiles or prescription drugs.

Question 5

The principle of diversity in the financial systems of American federalism means that

Accepted Answer

The answer of The principle of diversity in the financial...

Question 6

The largest source of tax revenue for states comes from

Accepted Answer

Sales taxes are the largest source of tax revenue for states, followed by personal income taxes and then property taxes. Severance taxes, which are taxes on natural resource extraction, are typically a smaller source of revenue for states.

Question 7

Personal and corporate income tax is

Accepted Answer

Personal and corporate income tax is considered attractive due to its high yield, elasticity, and ease of administration, making it a preferred choice for generating revenue.

Question 8

The general sales tax is

Accepted Answer

The answer of The general sales tax is
...

Question 9

A progressive tax is one that

Accepted Answer

A progressive tax is one where the tax rate increases as the taxpayer's income increases. This means that as a person's income rises, they pay a higher percentage of their income in taxes. This type of tax system is designed to be more fair, as those who have more income are able to pay a higher proportion of their earnings in taxes. Therefore, option D is the correct answer.

Question 10

The distribution of federal countercyclical aid dollars to the states and localities is a

Accepted Answer

Countercyclical aid dollars are distributed to states and localities during economic recessions to provide assistance for recovery. This aid is recognized by Congress as necessary to help offset the impacts of economic downturns on states and local communities.

Question 11

Evaluating tax options on the basis of "political accountability" means

Accepted Answer

Evaluating tax options on the basis of "political accountability" means considering how visible the effects of a particular tax are to the public and how easily politicians can be held accountable for those effects. This can include factors such as how transparent the tax system is, how visible the effects of the tax are on the economy and individuals, and how well politicians are able to communicate and explain their tax policies to the public. Option D best reflects this understanding of political accountability.

Question 12

Severance taxes, as a source of state revenues, are popular

Accepted Answer

Severance taxes are taxes imposed on the extraction of non-renewable resources such as oil, gas, and coal. States with abundant natural resources rely on these taxes, making them popular in such states. Therefore, the correct answer is D, which states that severance taxes are popular in states that have a lot of natural resources. Choices A, B, and C are incorrect because they do not accurately describe the popularity of severance taxes.

Question 13

Own-source revenue is money that is gathered from

Accepted Answer

Own-source revenue refers to the revenue generated by a government's own activities or assets, such as taxes and fees collected from people, services, and products within the jurisdiction of each level of government. Intergovernmental transfers of money (A) and grants-in-aid from the federal government (D) are not considered own-source revenue as they come from external sources. Income taxes (B) are a form of own-source revenue, but they are only one type of tax source and do not encompass all taxes and fees collected by a government.

Question 14

Use of an equity criterion in judging a tax would entail

Accepted Answer

An equity criterion in taxation refers to fairness or justice in the tax system. The ability to pay principle is essential in determining the equity of a tax system. The principle suggests that higher-income earners should bear a greater burden of taxes than lower-income earners because they have the ability to pay more. Therefore, determining the degree to which the burden of the tax is distributed according to the ability to pay is crucial in ensuring fairness in taxation.

Question 15

The use of "circuit breaker" legislation on property taxes is intended to

Accepted Answer

Circuit breaker legislation is intended to provide relief to taxpayers whose property taxes exceed a certain percentage of their income. This is done to make taxes more equitable for those who may not be able to afford high property taxes, such as the elderly or low-income earners. It places a cap on how much a person can be taxed based on their income level, making it more proportionate to their ability to pay.

Question 16

Today, property taxes represent the

Accepted Answer

Property taxes are the largest source of local government revenues in most states across the United States.

Question 17

Today, revenue from the federal government accounts for about _____ percent of state and local spending.

Accepted Answer

Today, revenue from the federal government accounts for about 30 percent of state and local spending.

Question 18

Evaluating tax options on the basis of "yield" means

Accepted Answer

Examining the amount of money that government can expect after it has paid to collect the tax is known as evaluating tax options on the basis of "yield".

Question 19

What two basic principles describe state and local financial systems?

Accepted Answer

D  State and local financial systems are characterized by interdependence, as they rely on each other and the federal government for funding and resources, and diversity, as they have varied sources of revenue and expenditure responsibilities. Autonomy and diversity also describe these systems, as they have the power to make independent financial decisions and have diverse financial structures.

Question 20

Congress passed the Internet Tax Freedom Act to

Accepted Answer

The Internet Tax Freedom Act was passed to keep states from taxing Internet sales.

Quiz 12: Taxing and Spending