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tax problems ch 1 true false




Question;True;/ False Questions;1.;Taxes;influence many types of business decisions but generally do not influence;personal decisions.;True False;2.;Taxes;influence business decisions such as where a business should locate or how a;business should be structured.;True False;3.;Tax policy;rarely plays an important part in presidential campaigns.;True False;4.;Margaret;recently received a parking ticket. This is a common example of a local;tax.;True False;5.;George;recently paid $50 to renew his driver's license. The $50 payment is;considered a tax.;True False;6.;A 1% charge;imposed by a local government on football tickets sold is not considered a;tax if all proceeds are earmarked to fund local schools.;True False;7.;One key;characteristic of a tax is that it is a required payment to a governmental;agency.;True False;8.;Common;examples of sin taxes include the taxes imposed on airline tickets and;gasoline.;True False;9.;One benefit;of a sin tax (e.g., a tax on cigarettes) is that it should increase the;demand for the products being taxed.;True False;10.;In addition;to raising revenues, specific U.S. taxes may have other objectives (e.g.;economic or social objectives).;True False;11.;The two;components of the tax calculation are the tax rate and the taxpayer's;status.;True False;12.;The tax base;for the federal income tax is taxable income.;True False;13.;A flat tax is;an example of a graduated tax system.;True False;14.;The main;difficulty in calculating an income tax is determining the correct amount of;the tax base.;True False;15.;A taxpayer's;average tax rate is the most appropriate tax rate to use in tax;planning.;True False;16.;The effective;tax rate, in general, provides a better depiction of a taxpayer's tax burden;than the average tax rate.;True False;17.;The effective;tax rate expresses the taxpayer's total tax as a percentage of the taxpayer's;taxable and nontaxable income.;True False;18.;In a;proportional (flat) tax rate system, the marginal tax rate will always equal;the average tax rate.;True False;19.;In a;regressive tax rate system, the marginal tax rate will often be greater than;the average tax rate.;True False;20.;A sales tax;is a common example of a progressive tax rate structure.;True False;21.;In terms of;effective tax rates, the sales tax can be viewed as a regressive tax.;True False;22.;While sales;taxes are quite common, currently the U.S. federal government does not impose;a sales tax.;True False;23.;The largest;federal tax, in terms of revenue collected, is the social security tax.;True False;24.;The 9th;Amendment to the U.S. Constitution removed all doubt that a federal income;tax was allowed under the U.S. Constitution.;True False;25.;A common;example of an employment related tax is the Medicare tax.;True False;26.;Self;employment taxes are charged on self employment income in addition to any;federal income tax.;True False;27.;Excise taxes;are typically levied on the value of a good purchased.;True False;28.;The estate;tax is assessed based on the fair market values of transfers made during a;taxpayer's life.;True False;29.;A use tax is;typically imposed by a state on goods purchased within the state.;True False;30.;Property;taxes may be imposed on both real and personal property.;True False;31.;Relative to;explicit taxes, implicit taxes are much easier to estimate.;True False;32.;Implicit;taxes are indirect taxes on tax-favored assets.;True False;33.;Dynamic;forecasting does not take into consideration taxpayers' responses to a tax;change when estimating tax revenues.;True False;34.;The income;and substitution effects are two opposing effects that one could consider in;static forecasting.;True False;35.;Horizontal;equity is defined in terms of taxpayers in similar situations whereas;vertical equity is defined in terms of taxpayers in different;situations.;True False;36.;Regressive;tax rate structures are typically considered to be vertically;equitable.;True False;37.;Estimated tax;payments are one way the federal income tax system addresses the;certainty" criterion in evaluating tax systems.;True False;38.;In;considering the "economy" criterion in evaluating tax systems, one;must consider this criterion from both the taxpayer and the government's;perspective.;True False


Paper#38048 | Written in 18-Jul-2015

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