Exam 17: Taxation and Resource Allocation

Under a proportional tax, the fraction of income paid in taxes

The average tax rate is

The corporate tax applies to firms' total revenues.

The main difference between direct and indirect taxes is that

A tax loophole is

The benefits principle states that those who

Philip purchased one million dollars' worth of New York City bonds.His interest earnings were $100,000.His total federal tax on this income will be

Which of the following taxes is most likely to be shifted?

The concept of vertical equity is that

A tax that does not change consumers' behavior creates no

An excise tax on gasoline is regressive if

The ability to shift a tax burden depends on the relative elasticities of demand and supply for the taxed commodity.

The second largest source of income for the federal budget is:

Figure 18-1 -If the supply of a good is perfectly inelastic, then suppliers will bear the full burden of an excise tax

Excise taxes are a form of sales tax.

"People who make more money should pay higher taxes" is an example of

If two families are identical with respect to size, income, general expenses, etc., and are taxed equally, we say that there is

Which of the following would be the most likely candidate for direct application of the benefits principle of taxation?

A congress member concerned about ensuring vertical equity in taxation would be most likely to argue for obtaining government revenue through a