Exam 12: The Design of the Tax System

Table 12-23 The dollar amounts in the last three columns are the taxes owed under the three different tax systems. -Refer to Table 12-23. Which of the three tax systems is regressive?

When a tax is justified on the basis that the taxpayers who pay the tax receive specific government services from payment of the tax, the tax

The equity of a tax system concerns whether the tax burden is distributed equally among the population.

Briefly evaluate the advantages and disadvantages of a lump-sum tax.

Table 12-15 -Refer to Table 12-15. In this tax system which of the following is possible?

From 2009 to 2012, the federal budget deficits were the largest budget shortfalls since World War II. The primary reason for the record-large deficits was

Vertical equity refers to a tax system in which individuals with similar incomes pay similar taxes.

Which of the following statements is correct?

Table 12-9 United States Income Tax Rates for a Single Individual, 2012 and 2013. -Refer to Table 12-9. Jake is a single person whose taxable income is $20,000 a year. What happened to his average tax rate between 2012 and 2013?

The income tax requires that taxpayers pay 10percent on the first $40,000 of income and 20 percent on all income over $40,000. Emily paid $9,000 in taxes. What were her marginal and average tax rates?

Table 12-22 -Refer to Table 12-22. A regressive tax is illustrated by tax

Pat calculates that for every extra dollar she earns, she owes the government 40 cents. Her total income now is $44,000, on which she pays taxes of $11,000. Determine her average tax rate and her marginal tax rate.

What are the characteristic(s) of an efficient tax system?

If we want to gauge how much the income tax system distorts incentives, we should use the

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 B exhibits

Suppose the government taxes 10 percent of the first $40,000 of income and 20 percent of all income over $40,000. Shahina paid $10,000 in taxes. What were her marginal and average tax rates?

Table 12-17 The following table shows the marginal tax rates for unmarried individuals for two years. 2009 2010 -Refer to Table 12-17. Suppose one goal of the tax system was to achieve vertical equity. While people may disagree about what is "equitable," based on the marginal tax rates given for the two years, which of the following statements is true?

If tax revenues from a cigarette tax are used to pay for healthcare expenses related to lung cancer, the cigarette tax could be justified using the .

Which tax system requires higher-income taxpayers to pay a higher percentage of their income in taxes?

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