Question 1

For a taxpayer passive tax, the total collection costs of the tax:

Accepted Answer

A)  will be directed to ensure voluntary compliance by larger taxpayers. 
B)  will be almost entirely administrative cost. 
C)  will include substantial cost for non-governmental representatives of the taxpayer. 
D)  will be zero if the taxpayer is fully passive. 
A)  will be directed to ensure voluntary compliance by larger taxpayers. 
B)  will be almost entirely administrative cost. 
C)  will include substantial cost for non-governmental representatives of the taxpayer. 
D)  will be zero if the taxpayer is fully passive. C

Question 2

Which of these elements does not represent tax transparency?

Accepted Answer

A)  amount of tax-visible burden of tax 
B)  administrative favoritism-no special treatment given 
C)  equity-tax is as equitable as possible 
D)  compliance requirements-calculations not mysterious 
A)  amount of tax-visible burden of tax 
B)  administrative favoritism-no special treatment given 
C)  equity-tax is as equitable as possible 
D)  compliance requirements-calculations not mysterious C

Question 3

Which of the following is most crucial in determining behavior changes that can cause losses in efficiency?

Accepted Answer

A)  the marginal tax rate 
B)  the average tax rate 
C)  the degree of progressivity 
D)  the number of tax brackets 
A)  the marginal tax rate 
B)  the average tax rate 
C)  the degree of progressivity 
D)  the number of tax brackets A

Question 4

Which of the following taxes is not taxpayer active?

Accepted Answer

A)  individual income tax 
B)  corporate income tax 
C)  retail sales tax 
D)  local property tax 
A)  individual income tax 
B)  corporate income tax 
C)  retail sales tax 
D)  local property tax

Question 5

In a regressive tax rate structure:

Accepted Answer

A)  the average tax rate is lower than the marginal tax rate. 
B)  the average tax rate increases with the size of the tax base. 
C)  the average tax rate decreases as the size of the tax base increases. 
D)  the average tax rate does not vary with the size of the tax base. 
A)  the average tax rate is lower than the marginal tax rate. 
B)  the average tax rate increases with the size of the tax base. 
C)  the average tax rate decreases as the size of the tax base increases. 
D)  the average tax rate does not vary with the size of the tax base.

Question 6

Why is it not appropriate to compare the cost of administering a local real property tax with the cost of administering the federal individual income tax?

Accepted Answer

A)  Federal employees are better paid than are local employees. 
B)  Local employees are often supported by federal grant funds raised by the income tax. 
C)  Federal income tax revenue is larger than local real property tax revenue. 
D)  The costs of collecting the individual income tax must include compliance cost as well as administrative cost; there is no significant compliance cost for the typical real property tax. 
A)  Federal employees are better paid than are local employees. 
B)  Local employees are often supported by federal grant funds raised by the income tax. 
C)  Federal income tax revenue is larger than local real property tax revenue. 
D)  The costs of collecting the individual income tax must include compliance cost as well as administrative cost; there is no significant compliance cost for the typical real property tax.

Question 7

The marginal tax rate equals:

Accepted Answer

A)  tax paid divided by the appropriate measure of affluence. 
B)  the tax liability resulting from true application of the tax statutes divided by the statutory base. 
C)  the tax rate required, at the margin, to balance the budget. 
D)  the amount by which a taxpayer's tax would increase from an additional dollar of the tax base. 
A)  tax paid divided by the appropriate measure of affluence. 
B)  the tax liability resulting from true application of the tax statutes divided by the statutory base. 
C)  the tax rate required, at the margin, to balance the budget. 
D)  the amount by which a taxpayer's tax would increase from an additional dollar of the tax base.

Question 8

Governments in the United States use a broad portfolio of taxes. Not all levels use the same taxes to the same degree. Which of the following statements is not correct?

Accepted Answer

A)  At least some local governments in every state levy a property tax. 
B)  Most, but not all, states levy a sales tax on all retail purchases or sales of tangible personal property, except transactions specifically exempt. 
C)  The doctrine of pre-emption dictates that, if the federal government taxes a particular commodity, states are not permitted to tax the commodity without specific federal authorization. 
D)  Most, but not all, states levy both individual and corporate income taxes. 
A)  At least some local governments in every state levy a property tax. 
B)  Most, but not all, states levy a sales tax on all retail purchases or sales of tangible personal property, except transactions specifically exempt. 
C)  The doctrine of pre-emption dictates that, if the federal government taxes a particular commodity, states are not permitted to tax the commodity without specific federal authorization. 
D)  Most, but not all, states levy both individual and corporate income taxes.

Question 9

Excluding any legislated changes in statutory tax rates, for which tax base would one expect the greatest revenue increase from a given increase in state economic activity?

Accepted Answer

A)  General sales tax 
B)  Real property taxes 
C)  Motor fuel taxes 
D)  Personal income taxes 
A)  General sales tax 
B)  Real property taxes 
C)  Motor fuel taxes 
D)  Personal income taxes

Question 10

The idea that individuals with the same economic capacity should pay the same tax represents:

Accepted Answer

A)  tax fairness. 
B)  vertical equity. 
C)  horizontal equity. 
D)  common-sense tax system. 
A)  tax fairness. 
B)  vertical equity. 
C)  horizontal equity. 
D)  common-sense tax system.

Question 11

A tax levied on a business will:

Accepted Answer

A)  reduce the profits of owners. 
B)  reduce the wages of workers. 
C)  increase the prices paid by consumers. 
D)  result in any or all of the above actions depending upon the market conditions the firm faces. 
A)  reduce the profits of owners. 
B)  reduce the wages of workers. 
C)  increase the prices paid by consumers. 
D)  result in any or all of the above actions depending upon the market conditions the firm faces.

Question 12

The concept of vertical equity states that:

Accepted Answer

A)  equals should be treated equally in a tax system. 
B)  unequals should be treated equally in a tax system. 
C)  equals should be treated unequally in a tax system. 
D)  unequals should be treated unequally in a tax system. 
A)  equals should be treated equally in a tax system. 
B)  unequals should be treated equally in a tax system. 
C)  equals should be treated unequally in a tax system. 
D)  unequals should be treated unequally in a tax system.

Question 13

Which of the following is correct?

Accepted Answer

A)  More than 25 percent of collections will result from direct enforcement audit, delinquency control, etc. action for the federal individual income tax. 
B)  Administration costs will be substantially greater than compliance costs for typical individual income taxes. 
C)  Compliance costs will be substantially greater than collection costs for real property taxes. 
D)  The U.S. real property taxes are one example of a taxpayer passive tax. 
A)  More than 25 percent of collections will result from direct enforcement audit, delinquency control, etc. action for the federal individual income tax. 
B)  Administration costs will be substantially greater than compliance costs for typical individual income taxes. 
C)  Compliance costs will be substantially greater than collection costs for real property taxes. 
D)  The U.S. real property taxes are one example of a taxpayer passive tax.

Question 14

Which of the following is not an example of a tax causing an economic dislocation?

Accepted Answer

A)  A high income individual chooses to invest in tax free municipal bonds over corporate bonds which have a higher advertised rate. 
B)  A car dealership holds a gigantic sale to reduce its inventory before property taxes are assessed 
C)  High income individuals pay a greater amount of taxes than do low income people, but high income individuals are not guaranteed more public services. 
D)  None of the above-all are examples of dislocation. 
A)  A high income individual chooses to invest in tax free municipal bonds over corporate bonds which have a higher advertised rate. 
B)  A car dealership holds a gigantic sale to reduce its inventory before property taxes are assessed 
C)  High income individuals pay a greater amount of taxes than do low income people, but high income individuals are not guaranteed more public services. 
D)  None of the above-all are examples of dislocation.

Question 15

Real property taxes tend to have significantly lower compliance cost per dollar of revenue raised than do individual income taxes because:

Accepted Answer

A)  local governments administer property taxes. 
B)  real property taxes are taxpayer passive while income taxes are taxpayer active. 
C)  individual income taxes yield vastly more revenue than do real property taxes. 
D)  the statement is inaccurate: real property compliance costs are actually higher. 
A)  local governments administer property taxes. 
B)  real property taxes are taxpayer passive while income taxes are taxpayer active. 
C)  individual income taxes yield vastly more revenue than do real property taxes. 
D)  the statement is inaccurate: real property compliance costs are actually higher.

For a taxpayer passive tax, the total collection costs of the tax:

Which of these elements does not represent tax transparency?

Which of the following is most crucial in determining behavior changes that can cause losses in efficiency?

Which of the following taxes is not taxpayer active?

In a regressive tax rate structure:

Why is it not appropriate to compare the cost of administering a local real property tax with the cost of administering the federal individual income tax?

The marginal tax rate equals:

Governments in the United States use a broad portfolio of taxes. Not all levels use the same taxes to the same degree. Which of the following statements is not correct?

Excluding any legislated changes in statutory tax rates, for which tax base would one expect the greatest revenue increase from a given increase in state economic activity?

The idea that individuals with the same economic capacity should pay the same tax represents:

A tax levied on a business will:

The concept of vertical equity states that:

Which of the following is correct?

Which of the following is not an example of a tax causing an economic dislocation?

Real property taxes tend to have significantly lower compliance cost per dollar of revenue raised than do individual income taxes because:

Fundamental Principles of Public Finance

The Logic of the Budget Process

Budget Methods and Practices

Federal Budget Structures and Institutions

State and Local Governments

Budget Classifications, Systems, and Reform: Trying to Make Better Choices

Capital Budgeting, Time Value of Money, and Cost-Benefit Analysis: Process, Structure, and Basic Tools

Major Tax Structures: Income Taxes

Major Tax Structures: Taxes on Goods and Services

Major Tax Structures: Property Taxes

Revenue From User Fees, User Charges, and Sales by Public Monopolies

Revenue Forecasts, Revenue Estimates, and Tax Expenditure Budgets

Intergovernmental Fiscal Relations: Diversity and Coordination

Debt Administration

Filters

Exam 8: Taxation: Criteria for Evaluating Revenue Options

For a taxpayer passive tax, the total collection costs of the tax:

Which of these elements does not represent tax transparency?

Which of the following is most crucial in determining behavior changes that can cause losses in efficiency?

Which of the following taxes is not taxpayer active?

In a regressive tax rate structure:

Why is it not appropriate to compare the cost of administering a local real property tax with the cost of administering the federal individual income tax?

The marginal tax rate equals:

Governments in the United States use a broad portfolio of taxes. Not all levels use the same taxes to the same degree. Which of the following statements is not correct?

Excluding any legislated changes in statutory tax rates, for which tax base would one expect the greatest revenue increase from a given increase in state economic activity?

The idea that individuals with the same economic capacity should pay the same tax represents:

A tax levied on a business will:

The concept of vertical equity states that:

Which of the following is correct?

Which of the following is not an example of a tax causing an economic dislocation?

Real property taxes tend to have significantly lower compliance cost per dollar of revenue raised than do individual income taxes because:

Fundamental Principles of Public Finance

The Logic of the Budget Process

Budget Methods and Practices

Federal Budget Structures and Institutions

State and Local Governments

Budget Classifications, Systems, and Reform: Trying to Make Better Choices

Capital Budgeting, Time Value of Money, and Cost-Benefit Analysis: Process, Structure, and Basic Tools

Major Tax Structures: Income Taxes

Major Tax Structures: Taxes on Goods and Services

Major Tax Structures: Property Taxes

Revenue From User Fees, User Charges, and Sales by Public Monopolies

Revenue Forecasts, Revenue Estimates, and Tax Expenditure Budgets

Intergovernmental Fiscal Relations: Diversity and Coordination

Debt Administration

Filters