Question 1

In terms of effective tax rates,the sales tax can be viewed as a regressive tax.

Accepted Answer

A) True 
 B)False

Question 2

One must consider the "economy" criterion in evaluating tax systems from both the taxpayer's and the government's perspective.

Accepted Answer

A) True 
 B)False

Question 3

Consider the following tax rate structures.Is it horizontally equitable? Why or why not? Is it vertically equitable? Why or why not?

Accepted Answer

The tax rate schedule is horizontally eq

Question 4

Leonardo,who is married but files separately,earns $80,000 of taxable income.He also has $15,000 in city of Tulsa bonds.His wife,Theresa,earns $50,000 of taxable income. If Leonardo earned an additional $30,000 of taxable income this year,what would be the marginal tax rate (rounded)on the extra income for 2019? (Use tax rate schedule.)

Accepted Answer

A) 22.00 percent 
B) 18.81 percent 
C) 24.00 percent 
D) 23.72 percent 
E) None of the choices are correct 
A) 22.00 percent 
B) 18.81 percent 
C) 24.00 percent 
D) 23.72 percent 
E) None of the choices are correct

Question 5

The two components of the tax calculation are the tax rate and the taxpayer's status.

Accepted Answer

A) True 
 B)False

Question 6

One key characteristic of a tax is that it is a required payment to a governmental agency.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements is true?

Accepted Answer

A) Municipal bond interest is subject to explicit federal tax. 
B) Municipal bond interest is subject to implicit tax. 
C) Municipal bonds typically pay a higher interest rate than corporate bonds with similar risk. 
D) All of these statements are true. 
E) None of these statements are true. 
A) Municipal bond interest is subject to explicit federal tax. 
B) Municipal bond interest is subject to implicit tax. 
C) Municipal bonds typically pay a higher interest rate than corporate bonds with similar risk. 
D) All of these statements are true. 
E) None of these statements are true.

Question 8

Margaret was issued a $150 speeding ticket.This is:

Accepted Answer

A) a tax because payment is required by law. 
B) a tax because the payment is not related to any specific benefit received from the government agency collecting the ticket. 
C) not a tax because it is considered a fine intended to punish illegal behavior. 
D) a tax because it is imposed by a government agency. 
E) not a tax because Margaret could have avoided payment if she did not speed. 
A) a tax because payment is required by law. 
B) a tax because the payment is not related to any specific benefit received from the government agency collecting the ticket. 
C) not a tax because it is considered a fine intended to punish illegal behavior. 
D) a tax because it is imposed by a government agency. 
E) not a tax because Margaret could have avoided payment if she did not speed.

Question 9

A taxpayer's average tax rate is the most appropriate tax rate to use in tax planning.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is true regarding real property taxes and personal property taxes?

Accepted Answer

A) Personal property taxes are assessed on permanent structures and land. 
B) Real property taxes are assessed on cars and boats. 
C) All U.S.states currently impose personal property taxes. 
D) Real property taxes are generally easier to administer than personal property taxes. 
E) None of the choices are correct. 
A) Personal property taxes are assessed on permanent structures and land. 
B) Real property taxes are assessed on cars and boats. 
C) All U.S.states currently impose personal property taxes. 
D) Real property taxes are generally easier to administer than personal property taxes. 
E) None of the choices are correct.

Question 11

The state of Georgia recently increased its tax on a carton of cigarettes by $2.00.What type of tax is this?

Accepted Answer

A) A sin tax 
B) An excise tax 
C) It is not a tax; it is a fine 
D) A sin tax and an excise tax are correct 
E) None of the choices are correct 
A) A sin tax 
B) An excise tax 
C) It is not a tax; it is a fine 
D) A sin tax and an excise tax are correct 
E) None of the choices are correct

Question 12

Marc,a single taxpayer,earns $60,000 in taxable income and $5,000 in interest from an investment in city of Birmingham bonds.Using the U.S.tax rate schedule for year 2019,what is his current marginal tax rate? (Use tax rate schedule.)

Accepted Answer

A) 12.00 percent 
B) 22.00 percent 
C) 24.00 percent 
D) 32.00 percent 
E) None of the choices are correct 
A) 12.00 percent 
B) 22.00 percent 
C) 24.00 percent 
D) 32.00 percent 
E) None of the choices are correct

Question 13

Which of the following is considered a tax?

Accepted Answer

A) Tolls 
B) Parking meter fees 
C) Annual licensing fees 
D) A local surcharge paid on retail sales to fund public schools 
E) Entrance fees paid at national parks 
A) Tolls 
B) Parking meter fees 
C) Annual licensing fees 
D) A local surcharge paid on retail sales to fund public schools 
E) Entrance fees paid at national parks

Question 14

Jackson has the choice to invest in city of Mitchell bonds or Sundial,Inc.corporate bonds that pay 10 percent interest.Jackson is a single taxpayer who earns $55,000 annually.Assume that the city of Mitchell bonds and the Sundial,Inc.bonds have similar risk. Assume the original facts as given except that Jackson is a head of household taxpayer and the city of Mitchell pays interest of 8 percent.How would you advise Jackson to invest his money?

Accepted Answer

A) Invest in Sundial,Inc.bonds because their explicit tax is greater than the implicit tax on city of Mitchell bonds. 
B) Invest in city of Mitchell bonds because their implicit tax is greater than the explicit tax on Sundial,Inc.bonds. 
C) Invest in Sundial,Inc.bonds because their explicit tax is less than the implicit tax on city of Mitchell bonds. 
D) Invest in city of Mitchell bonds because their implicit tax is less than the explicit tax on Sundial,Inc.bonds. 
E) None of the choices are correct. 
A) Invest in Sundial,Inc.bonds because their explicit tax is greater than the implicit tax on city of Mitchell bonds. 
B) Invest in city of Mitchell bonds because their implicit tax is greater than the explicit tax on Sundial,Inc.bonds. 
C) Invest in Sundial,Inc.bonds because their explicit tax is less than the implicit tax on city of Mitchell bonds. 
D) Invest in city of Mitchell bonds because their implicit tax is less than the explicit tax on Sundial,Inc.bonds. 
E) None of the choices are correct.

Question 15

Taxes influence many types of business decisions but generally do not influence personal decisions.

Accepted Answer

A) True 
 B)False

Question 16

Raquel recently overheard two journalism students discussing the merits of the federal tax system.One student offered as an example of unfairness a well-known politician's spouse,who paid little income tax,as most of the spouse's income was earned in the form of municipal bond interest.What type of taxes is the journalism student considering in his example? What type of taxes is he ignoring? Define each type of tax.What role does each type of tax play in calculating relative tax burdens? What role does each type of tax play in evaluating fairness?

Accepted Answer

The student is considering explicit taxe

Question 17

The difficulty in calculating a tax is typically in the determination of:

Accepted Answer

A) the correct tax rate. 
B) where to file the tax return. 
C) the tax base. 
D) the due date for the return. 
E) None of the choices are correct. 
A) the correct tax rate. 
B) where to file the tax return. 
C) the tax base. 
D) the due date for the return. 
E) None of the choices are correct.

Question 18

Taxes influence business decisions such as where a business should locate or how a business should be structured.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is true regarding tax-advantaged assets?

Accepted Answer

A) They are typically subject to excise taxes to account for their low explicit taxes. 
B) A corporate bond is typically considered a tax-advantaged asset. 
C) They are often subject to implicit taxes. 
D) A corporate bond is typically considered a tax-advantaged asset.They are often subject to implicit taxes but they are not typically subject to excise taxes to account for their low explicit taxes. 
E) None of the choices are correct. 
A) They are typically subject to excise taxes to account for their low explicit taxes. 
B) A corporate bond is typically considered a tax-advantaged asset. 
C) They are often subject to implicit taxes. 
D) A corporate bond is typically considered a tax-advantaged asset.They are often subject to implicit taxes but they are not typically subject to excise taxes to account for their low explicit taxes. 
E) None of the choices are correct.

Question 20

To calculate a tax,you need to know: I.the tax base
II)the taxing agency
III)the tax rate
IV)the purpose of the tax

Accepted Answer

A) Only I is correct. 
B) Only IV is correct. 
C) Only III is correct. 
D) Items I through IV are correct. 
E) I and III are correct. 
A) Only I is correct. 
B) Only IV is correct. 
C) Only III is correct. 
D) Items I through IV are correct. 
E) I and III are correct.

Exam 1: An Introduction to Tax

In terms of effective tax rates,the sales tax can be viewed as a regressive tax.

One must consider the "economy" criterion in evaluating tax systems from both the taxpayer's and the government's perspective.

Consider the following tax rate structures.Is it horizontally equitable? Why or why not? Is it vertically equitable? Why or why not?

The two components of the tax calculation are the tax rate and the taxpayer's status.

One key characteristic of a tax is that it is a required payment to a governmental agency.

Which of the following statements is true?

Margaret was issued a $150 speeding ticket.This is:

A taxpayer's average tax rate is the most appropriate tax rate to use in tax planning.

Which of the following is true regarding real property taxes and personal property taxes?

The state of Georgia recently increased its tax on a carton of cigarettes by $2.00.What type of tax is this?

Marc,a single taxpayer,earns $60,000 in taxable income and $5,000 in interest from an investment in city of Birmingham bonds.Using the U.S.tax rate schedule for year 2019,what is his current marginal tax rate? (Use tax rate schedule.)

Which of the following is considered a tax?

Taxes influence many types of business decisions but generally do not influence personal decisions.

The difficulty in calculating a tax is typically in the determination of:

Taxes influence business decisions such as where a business should locate or how a business should be structured.

Which of the following is true regarding tax-advantaged assets?

To calculate a tax,you need to know: I.the tax base II)the taxing agency III)the tax rate IV)the purpose of the tax

Tax Compliance,the Irs,and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview,dependents,and Filing Status

Gross Income and Exclusions

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income,deductions,and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation,reorganization,and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Ustaxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters