Question 1

A wealth tax can be justified because it

Accepted Answer

A) helps to correct certain (inevitable)problems that arise in the administration of an income tax. 
B) the higher an individuals wealth,the greater his or her ability to pay,other things- including income - being the same. 
C) reduces the concentration of wealth,which is desirable socially and politically. 
D) are payments for benefits that wealth holders receive from government. 
E) all of the above. 
A) helps to correct certain (inevitable)problems that arise in the administration of an income tax. 
B) the higher an individuals wealth,the greater his or her ability to pay,other things- including income - being the same. 
C) reduces the concentration of wealth,which is desirable socially and politically. 
D) are payments for benefits that wealth holders receive from government. 
E) all of the above. E

Question 2

This chapter has spent a lot of time dealing with issues of wealth and consumption.One suggestion has been to have a tax on wealth.What are some of the benefits of this proposal?

Accepted Answer

Wealth taxes help to correct certain problems that arise in the administration of an income tax,and wealth taxation reduces the concentration of wealth,which is desirable socially and politically.

Question 3

A gross estate is all of the taxable assets of a person at the time of death.

Accepted Answer

A) True 
 B)False  False

Question 4

When each firm is liable for taxes on total sales but can claim the taxes already paid by suppliers as a credit against liability we are using the

Accepted Answer

A) reserve method. 
B) chain method. 
C) invoice method. 
D) VAT method. 
A) reserve method. 
B) chain method. 
C) invoice method. 
D) VAT method.

Question 5

A consumption tax generally will be borne according to labor earnings.

Accepted Answer

A) True 
 B)False

Question 6

Consumption taxes are generally viewed as

Accepted Answer

A) regressive. 
B) progressive. 
C) simple to calculate. 
D) multiplicative. 
A) regressive. 
B) progressive. 
C) simple to calculate. 
D) multiplicative.

Question 7

Wealth taxes are assessed on a stock of assets instead of a flow such as income or sales.

Accepted Answer

A) True 
 B)False

Question 8

Throughout this discussion of taxes,there has been repeated mention of the need for progressivity in the tax system.Why is this an important goal for tax systems in most societies?

Accepted Answer

Society generally desires a sy

Question 9

President Obama has proposed making the _____ estate tax rate permanent.

Accepted Answer

A) 13.0% 
B) 45.0% 
C) 51.3% 
D) 55.0% 
A) 13.0% 
B) 45.0% 
C) 51.3% 
D) 55.0%

Question 10

Sales taxes are generally progressive.

Accepted Answer

A) True 
 B)False

Question 11

The largest source of tax revenues for states is

Accepted Answer

A) general sales. 
B) motor fuel. 
C) alcoholic beverages. 
D) tobacco. 
A) general sales. 
B) motor fuel. 
C) alcoholic beverages. 
D) tobacco.

Question 12

The Value Added Tax (VAT)is

Accepted Answer

A) not often used in the United States. 
B) a percentage tax. 
C) added at each stage to production. 
D) all of the above. 
A) not often used in the United States. 
B) a percentage tax. 
C) added at each stage to production. 
D) all of the above.

Question 13

Sale taxes are

Accepted Answer

A) easy to administer at lower rates. 
B) correctives for externalities. 
C) substitutes for user fees. 
D) all of the above. 
A) easy to administer at lower rates. 
B) correctives for externalities. 
C) substitutes for user fees. 
D) all of the above.

Question 14

Optimal commodity taxation would

Accepted Answer

A) put a tax on leisure time,which is currently untaxed. 
B) have the smallest amount of excess burden possible for a given amount of tax revenue. 
C) optimize tax rates on the wealthiest Americans. 
D) eliminate tax evasion in the United States. 
A) put a tax on leisure time,which is currently untaxed. 
B) have the smallest amount of excess burden possible for a given amount of tax revenue. 
C) optimize tax rates on the wealthiest Americans. 
D) eliminate tax evasion in the United States.

Question 15

Little Percy lives in two periods.His earnings in the present are 150;in the future he will earn 10% more than today.The interest rate is 5 percent.If his consumption today is 160,what is the most he can consume in the future?

Accepted Answer

Lifetime earnings must equal l

Question 16

A tax,in which amounts transferred as gifts and bequests are jointly taken into account,is known as

Accepted Answer

A) inheritance tax. 
B) death tax. 
C) accessions tax. 
D) unified transfer tax. 
A) inheritance tax. 
B) death tax. 
C) accessions tax. 
D) unified transfer tax.

Question 17

Under a consumption tax,only current expenditures are taxed.

Accepted Answer

A) True 
 B)False

Question 18

A tax levied on an individual's total lifetime acquisitions from inheritances and gifts is known as

Accepted Answer

A) inheritance tax. 
B) death tax. 
C) accessions tax. 
D) unified transfer tax. 
A) inheritance tax. 
B) death tax. 
C) accessions tax. 
D) unified transfer tax.

Question 19

Excise taxes are distortionary taxes.

Accepted Answer

A) True 
 B)False

Question 20

Value-added taxes (VAT)are very popular in the United States.

Accepted Answer

A) True 
 B)False

Exam 21: Fundamental Tax Reform: Taxes on Consumption and Wealth

A wealth tax can be justified because it

This chapter has spent a lot of time dealing with issues of wealth and consumption.One suggestion has been to have a tax on wealth.What are some of the benefits of this proposal?

A gross estate is all of the taxable assets of a person at the time of death.

When each firm is liable for taxes on total sales but can claim the taxes already paid by suppliers as a credit against liability we are using the

A consumption tax generally will be borne according to labor earnings.

Consumption taxes are generally viewed as

Wealth taxes are assessed on a stock of assets instead of a flow such as income or sales.

Throughout this discussion of taxes,there has been repeated mention of the need for progressivity in the tax system.Why is this an important goal for tax systems in most societies?

President Obama has proposed making the _____ estate tax rate permanent.

Sales taxes are generally progressive.

The largest source of tax revenues for states is

The Value Added Tax (VAT)is

Sale taxes are

Optimal commodity taxation would

Little Percy lives in two periods.His earnings in the present are 150;in the future he will earn 10% more than today.The interest rate is 5 percent.If his consumption today is 160,what is the most he can consume in the future?

A tax,in which amounts transferred as gifts and bequests are jointly taken into account,is known as

Under a consumption tax,only current expenditures are taxed.

A tax levied on an individual's total lifetime acquisitions from inheritances and gifts is known as

Excise taxes are distortionary taxes.

Value-added taxes (VAT)are very popular in the United States.

Introduction

Tools of Positive Analysis

Tools of Normative Analysis

Public Goods

Externalities

Political Economy

Education

Cost-Benefit Analysis

The Health Care Market

Government and the Market for Health Care

Social Security

Income Redistribution: Conceptual Issues

Expenditure Programs for the Poor

Taxation and Income Distribution

Taxation and Efficiency

Efficient and Equitable Taxation

The Personal Income Tax

Personal Taxation and Behavior

The Corporation Tax

Deficit Finance

Public Finance in a Federal System

Filters