Question 1

In any given year,many people at the tails of the income distribution are only there temporarily _____.

Accepted Answer

A)  because of changes in the tax code
B)  making it difficult to track them for determining progressivity
C)  thereby overstating the progressive nature of the tax system
D)  making it important to look at the progressivity of the tax system in terms of lifetime incomeE) C) and D)
F) A) and D)

Question 2

Which of the following is not a reason for the establishment of intergovernmental transfer programs?

Accepted Answer

A)  Higher level governments want to encourage lower governments to undertake certain programs.
B)  Taxes are harder to avoid at higher levels of government.
C)  To provide for national defense resources utilized at the local level.
D)  Equalization of resources between richer and poorer localitiesE) B) and D)
F) C) and D)

Question 3

State whether property taxes,income taxes,and sales taxes are progressive,regressive,proportional,or none of the above.What about the tax system as a whole?

Accepted Answer

Property taxes are not progressive,regre...

Question 4

The problem of a complex tax code filled with loopholes may be overcome by proposing a complete overhaul of the entire system that lowers taxes for everyone because it _____.

Accepted Answer

A)  represents a Pareto superior move
B)  takes advantage of rational ignorance
C)  benefits all special interests
D)  a and bE) All of the above
F) A) and C)

Question 5

The best way to evaluate the effect of a specific tax is _____.

Accepted Answer

A)  to consider the tax in isolation
B)  to consider the tax in the context of the entire tax system
C)  to consider whether a tax is progressive,regressive,or proportional
D)  a and cE) B) and C)
F) None of the above B

Question 6

Most changes to the tax code are in the form of loopholes that allows special interests to reduce their tax liability.

Accepted Answer

A) True 
 B)False

Question 7

When evaluating the taxation of dividends in isolation,it is easy to overlook the double taxation of saving.

Accepted Answer

A) True 
 B)False  True

Question 8

A pessimistic view of the 1986 tax reform is that Congress simplified the tax code _____.

Accepted Answer

A)  because it represented a Pareto superior move
B)  created new loophole opportunities that did not exist previously
C)  in order to increase the efficiency in the system
D)  because it was in the best interests of the special interestsE) A) and B)
F) A) and C)

Question 9

The most progressive tax of the major taxes employed in the United States _____.

Accepted Answer

A)  are sales taxes
B)  are excise taxes
C)  are income taxes
D)  are property taxesE) A) and B)
F) A) and C)

Question 10

What is meant by revenue-neutral tax reform? How might agreeing to revenue-neutral tax reform help lead to a more efficient tax system?

Accepted Answer

Revenue-neutral tax reform means changin...

Question 11

A major source of revenues for state and local governments is _____.

Accepted Answer

A)  income taxes
B)  payroll taxes
C)  intergovernmental revenues
D)  estate taxationE) A) and B)
F) B) and C)

Question 12

While regressive taxes are considered inequitable,cigarette taxation is popular because _____.

Accepted Answer

A)  it is a sumptuary tax
B)  it mainly hurts tobacco farmers in a few Southern states
C)  in a lifetime sense it is a progressive tax
D)  people are inconsistentE) B) and C)
F) All of the above

Question 13

The federal government relies most heavily on which source of revenue?

Accepted Answer

A)  individual income taxes
B)  corporate income taxes
C)  social insurance payroll taxes
D)  excise taxesE) A) and B)
F) A) and C)

Question 14

In 1950,the largest category of state and local revenue (as a percentage of GDP) came from _____.

Accepted Answer

A)  individual income taxes
B)  sales and gross receipt taxes
C)  property taxes
D)  estate taxesE) A) and B)
F) None of the above

Question 15

Special interests are likely to have less influence over tax reform _____.

Accepted Answer

A)  when the reform is small
B)  when the reform is comprehensive
C)  when the reform is at the local level
D)  when the reform is at the state levelE) C) and D)
F) B) and D)

Question 16

Federal taxes make up about ______ percent of total taxes.

Accepted Answer

A)  40
B)  50
C)  60
D)  70E) A) and B)
F) A) and D)

Question 17

Considering all taxes collected at all levels,taxation in the United States is _____ when looked at in terms of lifetime income.

Accepted Answer

A)  proportional
B)  slightly progressive
C)  slightly regressive
D)  n-shapedE) B) and C)
F) B) and D)

Question 18

Intergovernmental revenue is an insignificant source of state and local revenue.

Accepted Answer

A) True 
 B)False  False

Question 19

Changes in the federal tax structure have a significant effect on state income tax collections because most states base their tax structure on the federal tax structure.

Accepted Answer

A) True 
 B)False

Question 20

Most income tax revenues are collected by _____.

Accepted Answer

A)  the federal government
B)  state governments
C)  county governments
D)  city governmentsE) All of the above
F) None of the above

Exam 16: The Tax System in the United States

In any given year,many people at the tails of the income distribution are only there temporarily _____.

Correct AnswerverifiedShow Answer

Which of the following is not a reason for the establishment of intergovernmental transfer programs?

Correct AnswerverifiedShow Answer

State whether property taxes,income taxes,and sales taxes are progressive,regressive,proportional,or none of the above.What about the tax system as a whole?

Correct AnswerverifiedProperty taxes are not progressive,regre...View AnswerShow Answer

The problem of a complex tax code filled with loopholes may be overcome by proposing a complete overhaul of the entire system that lowers taxes for everyone because it _____.

Correct AnswerverifiedShow Answer

The best way to evaluate the effect of a specific tax is _____.

Correct AnswerverifiedB

Most changes to the tax code are in the form of loopholes that allows special interests to reduce their tax liability.

Correct AnswerverifiedShow Answer

When evaluating the taxation of dividends in isolation,it is easy to overlook the double taxation of saving.

Correct AnswerverifiedTrue

A pessimistic view of the 1986 tax reform is that Congress simplified the tax code _____.

Correct AnswerverifiedShow Answer

The most progressive tax of the major taxes employed in the United States _____.

Correct AnswerverifiedShow Answer

What is meant by revenue-neutral tax reform? How might agreeing to revenue-neutral tax reform help lead to a more efficient tax system?

Correct AnswerverifiedRevenue-neutral tax reform means changin...View AnswerShow Answer

A major source of revenues for state and local governments is _____.

Correct AnswerverifiedShow Answer

While regressive taxes are considered inequitable,cigarette taxation is popular because _____.

Correct AnswerverifiedShow Answer

The federal government relies most heavily on which source of revenue?

Correct AnswerverifiedShow Answer

In 1950,the largest category of state and local revenue (as a percentage of GDP) came from _____.

Correct AnswerverifiedShow Answer

Special interests are likely to have less influence over tax reform _____.

Correct AnswerverifiedShow Answer

Federal taxes make up about ______ percent of total taxes.

Correct AnswerverifiedShow Answer

Considering all taxes collected at all levels,taxation in the United States is _____ when looked at in terms of lifetime income.

Correct AnswerverifiedShow Answer

Intergovernmental revenue is an insignificant source of state and local revenue.

Correct AnswerverifiedFalse

Changes in the federal tax structure have a significant effect on state income tax collections because most states base their tax structure on the federal tax structure.

Correct AnswerverifiedShow Answer

Most income tax revenues are collected by _____.

Correct AnswerverifiedShow Answer

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Property taxes are not progressive,regre...
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B

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True

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Revenue-neutral tax reform means changin...
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False

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