Question 1

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. A

Question 2

Under a consumption tax,only current expenditures are taxed.

Accepted Answer

A)  True 
B)  False 
C)  Uncertain 
A)  True 
B)  False 
C)  Uncertain A

Question 3

Who pays a consumption tax?

Accepted Answer

A)  People who purchase goods 
B)  Firms who purchase goods 
C)  The elderly when they purchase goods 
D)  All of the answer options are correct. 
A)  People who purchase goods 
B)  Firms who purchase goods 
C)  The elderly when they purchase goods 
D)  All of the answer options are correct. D

Question 4

The general tax can be considered a retail sales tax.

Accepted Answer

A)  True 
B)  False 
C)  Uncertain 
A)  True 
B)  False 
C)  Uncertain

Question 5

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 6

A publisher sells $400,000 worth of books,magazines,and other reading materials in a given year.The publisher earns a profit of $100,000 that year.Her purchase invoices indicate that she bought $100,000 worth of glue,paper,and other materials during the year.Her labor costs were $150,000,and she purchased $45,000 of new equipment that year.Calculate her tax liability under a 12% consumption-type,value-added tax.

Accepted Answer

Value added is $400,000 - $100,000 = $30

Question 7

The gross estate is

Accepted Answer

A)  very disgusting. 
B)  all property owned by decedent at time of death. 
C)  general property that is held in a trust. 
D)  being phased out of current tax law. 
A)  very disgusting. 
B)  all property owned by decedent at time of death. 
C)  general property that is held in a trust. 
D)  being phased out of current tax law.

Question 8

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 9

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 10

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

Accepted Answer

A)  True 
B)  False 
C)  Uncertain 
A)  True 
B)  False 
C)  Uncertain

Question 11

Sale taxes are

Accepted Answer

A)  easy to administer at lower rates. 
B)  correctives for externalities. 
C)  substitutes for user fees. 
D)  all of these answer options are correct. 
A)  easy to administer at lower rates. 
B)  correctives for externalities. 
C)  substitutes for user fees. 
D)  all of these answer options are correct.

Question 12

Excise taxes are distortionary taxes.

Accepted Answer

A)  True 
B)  False 
C)  Uncertain 
A)  True 
B)  False 
C)  Uncertain

Question 13

Disadvantages of a consumption tax are

Accepted Answer

A)  the administrative problems. 
B)  the transitional problems. 
C)  dealing with gifts and bequests. 
D)  all of these answer options are correct. 
A)  the administrative problems. 
B)  the transitional problems. 
C)  dealing with gifts and bequests. 
D)  all of these answer options are correct.

Question 14

Which of the following is an unit excise tax?

Accepted Answer

A)  A tax of 15% 
B)  An admission fee of $2.00 on each ticket purchased 
C)  An ad valorem tax of $3.00 
D)  An income tax of $3.00 
A)  A tax of 15% 
B)  An admission fee of $2.00 on each ticket purchased 
C)  An ad valorem tax of $3.00 
D)  An income tax of $3.00

Question 15

Suppose that the total number of hours (T)is 720 and the wage rate is $10.Suppose further that all income is spent on consumption,so that the vertical axis is also total consumption.
(A)Sketch this graph.
(B)Sketch the graph if a 5% consumption tax is imposed.
(C)Can you say conclusively that a consumption tax will lower hours worked?

Accepted Answer

(A)and (B) @#IMG-DLM& (C)We ca

Question 16

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

Question 17

In the next three years,the federal tax system could be replaced with a national retail sales tax.

Accepted Answer

A)  True 
B)  False 
C)  Uncertain 
A)  True 
B)  False 
C)  Uncertain

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

A differential commodity tax is the same as an excise tax.

Accepted Answer

A)  True 
B)  False 
C)  Uncertain 
A)  True 
B)  False 
C)  Uncertain

Question 20

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

Accepted Answer

A)  True 
B)  False 
C)  Uncertain 
A)  True 
B)  False 
C)  Uncertain

Consumption taxes are generally viewed as

Under a consumption tax,only current expenditures are taxed.

Who pays a consumption tax?

The general tax can be considered a retail sales tax.

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

The gross estate is

The largest source of tax revenues for states is

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

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

Sale taxes are

Excise taxes are distortionary taxes.

Disadvantages of a consumption tax are

Which of the following is an unit excise tax?

The Value Added Tax (VAT)is

In the next three years,the federal tax system could be replaced with a national retail sales tax.

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

A differential commodity tax is the same as an excise tax.

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

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

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

Consumption taxes are generally viewed as

Under a consumption tax,only current expenditures are taxed.

Who pays a consumption tax?

The general tax can be considered a retail sales tax.

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

The gross estate is

The largest source of tax revenues for states is

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

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

Sale taxes are

Excise taxes are distortionary taxes.

Disadvantages of a consumption tax are

Which of the following is an unit excise tax?

The Value Added Tax (VAT)is

In the next three years,the federal tax system could be replaced with a national retail sales tax.

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

A differential commodity tax is the same as an excise tax.

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

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