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Exam 12: The Design of the Tax System

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Question 151

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Of the following countries, which country's government collects the least amount of tax revenue as a percentage of that country's total income?

A) Japan
B) United States
C) Mexico
D) Denmark

E) A) and B)
F) A) and C)

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Question 152

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The flypaper theory of tax incidence

A) ignores the indirect effects of taxes.
B) assumes that most taxes should be "stuck on " the rich.
C) says that once a tax has been imposed, there is little chance of it changing, so in essence people are stuck with it.
D) suggests that taxes are like flies because they are everywhere and will never go away.

E) A) and B)
F) A) and D)

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Question 153

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Table 12-13 The table below provides information on the 4 households that make up a small economy and how much they would pay in taxes under 3 types of taxes. -Refer to Table 12-13. In this economy Tax A exhibits

A tax system based on the ability-to-pay principle claims that all citizens should

According to the ability-to-pay principle, it is fair for people to pay taxes based on their ability to handle the financial burden.

Time spent filling out tax forms, time spent keeping tax records, and government resources spent to enforce tax laws are examples of the of the U.S. income tax system.

Table 12-9 United States Income Tax Rates for a Single Individual, 2012 and 2013. -Refer to Table 12-9. Ruby Sue is a single person whose taxable income is $100,000 a year. What is her marginal tax rate in 2013?

"Income security" programs comprised 33 percent of the federal government's spending in 2011. Give a few examples of the programs included in this category.

Horizontal and vertical equity are the two primary measures of efficiency of a tax system.

Table 12-10 -Refer to Table 12-10. If Si has $100,000 in taxable income, his marginal tax rate is

Table 12-3 -Refer to Table 12-3. What is the marginal tax rate for a person who makes $35,000?

In which of the following tax systems do taxes increase as income increases?

Table 12-11 -Refer to Table 12-11. If Al has taxable income of $165,000, his marginal tax rate is

'The U.S. tax code gives preferential treatment to investors in municipal bonds. This is an example of

In 2011, approximately how much of federal government spending went to income security?

Scenario 12-5 Senator Filch argues that a tax must be paid by people who benefit from government services. Senator Fudge argues that a tax must be paid in accordance with a person's ability to bear the tax burden. Senator Malfoy argues that people with a greater ability to pay a tax should pay a larger amount. Senator Moody argues that taxpayers with similar abilities to pay should contribute the same amount. -Refer to Scenario 12-5. Which Senator is advocating taxes based on the benefits principle?

Today the typical American pays approximately what percent of income in taxes, including all federal, state, and local taxes?

Vertical equity in taxation refers to the idea that people

Table 12-11 -Refer to Table 12-11. If Al has taxable income of $165,000, his tax liability is

The marginal tax rate for an unmarried taxpayer in the highest taxable income category for 2013 is approximately