Question 1

The effective tax rate expresses the taxpayer's total tax as a percentage of the taxpayer's taxable and nontaxable income.

Accepted Answer

A) True 
 B)False

Question 2

Manny, a single taxpayer, earns $68,400 per year in taxable income and an additional $12,340 per year in city of Boston bonds. If Manny earns an additional $38,600 in taxable income in 2020, what is his marginal tax rate on this income? (Use tax rate schedule.)(Round your final answer to two decimal places.)

Accepted Answer

A) 17.92 percent 
B) 22.00 percent 
C) 23.11 percent 
D) 24.00 percent 
E) None of the choices are correct 
A) 17.92 percent 
B) 22.00 percent 
C) 23.11 percent 
D) 24.00 percent 
E) None of the choices are correct

Question 3

The main difficulty in calculating an income tax is determining the correct amount of the tax base.

Accepted Answer

A) True 
 B)False

Question 4

One key characteristic of a tax is that it is a required payment to a governmental agency.

Accepted Answer

A) True 
 B)False

Question 5

Earmarked taxes are:

Accepted Answer

A) taxes assessed only on certain taxpayers. 
B) taxes assessed to fund a specific purpose. 
C) taxes assessed for only a specific time period. 
D) taxes assessed to discourage less desirable behavior. 
E) None of the choices are correct. 
A) taxes assessed only on certain taxpayers. 
B) taxes assessed to fund a specific purpose. 
C) taxes assessed for only a specific time period. 
D) taxes assessed to discourage less desirable behavior. 
E) None of the choices are correct.

Question 6

Curtis invests $775,000 in a city of Athens bond that pays 9.75 percent interest. Alternatively, Curtis could have invested the $775,000 in a bond recently issued by Initech, Incorporated that pays 12 percent interest with similar risk as the city of Athens bond. Assume that Curtis's marginal tax rate is 24 percent. What is Curtis's after-tax rate of return on the city of Athens bond?

Accepted Answer

A) 8)07 percent 
B) 9)59 percent 
C) 9)75 percent 
D) 11.75 percent 
E) None of the choices are correct 
A) 8)07 percent 
B) 9)59 percent 
C) 9)75 percent 
D) 11.75 percent 
E) None of the choices are correct

Question 7

Al believes that SUVs have negative social and environmental effects because of their increased carbon monoxide emissions. He proposes eliminating sales taxes on smaller automobiles in favor of higher sales taxes levied on SUVs. Al performs some calculations and comes to the conclusion that based on the current number of SUVs owned in the U.S., exactly the same amount of total sales tax will be collected under his reformed system. Which of the following concepts explains why Al's idea may not work?

Accepted Answer

A) The ability to pay principle 
B) Horizontal equity 
C) Substitution effect 
D) Vertical equity 
E) None of the choices are correct 
A) The ability to pay principle 
B) Horizontal equity 
C) Substitution effect 
D) Vertical equity 
E) None of the choices are correct

Question 8

Relative to explicit taxes, implicit taxes are much easier to estimate.

Accepted Answer

A) True 
 B)False

Question 9

Leonardo, who is married but files separately, earns $72,000 of taxable income. He also has $20,000 in city of Tulsa bonds. His wife, Theresa, earns $55,000 of taxable income. If Leonardo and his wife file married filing jointly in 2020, what would be their average tax rate?(Use tax rate schedule.)(Round your final answer to two decimal places.)

Accepted Answer

A) 12.00 percent 
B) 22.00 percent 
C) 15.37 percent 
D) 22.42 percent 
E) None of the choices are correct 
A) 12.00 percent 
B) 22.00 percent 
C) 15.37 percent 
D) 22.42 percent 
E) None of the choices are correct

Question 10

Manny, a single taxpayer, earns $65,000 per year in taxable income and an additional $12,000 per year in city of Boston bonds. What is Manny's current marginal tax rate for 2020? (Use tax rate schedule.)

Accepted Answer

A) 11.39 percent 
B) 12.00 percent 
C) 13.10 percent 
D) 15.52 percent 
E) None of the choices are correct. 
A) 11.39 percent 
B) 12.00 percent 
C) 13.10 percent 
D) 15.52 percent 
E) None of the choices are correct.

Question 11

The income and substitution effects are two opposing effects that one could consider in static forecasting.

Accepted Answer

A) True 
 B)False

Question 12

To calculate a tax, you need to know: I. the tax base
II) the taxing agency
III) the tax rate
IV) the purpose of the tax

Accepted Answer

A) Only I is correct. 
B) Only IV is correct. 
C) Only III is correct. 
D) Items I through IV are correct. 
E) I and III are correct. 
A) Only I is correct. 
B) Only IV is correct. 
C) Only III is correct. 
D) Items I through IV are correct. 
E) I and III are correct.

Question 13

Curtis invests $250,000 in a city of Athens bond that pays 7 percent interest. Alternatively, Curtis could have invested the $250,000 in a bond recently issued by Initech, Incorporated that pays 9percent interest with similar risk as the city of Athens bond. Assume that Curtis's marginal tax rate is 24 percent. What is Curtis's after-tax rate of return on the city of Athens bond?

Accepted Answer

A) 5)32 percent 
B) 6)84 percent 
C) 7)00 percent 
D) 9)00 percent 
E) None of the choices are correct 
A) 5)32 percent 
B) 6)84 percent 
C) 7)00 percent 
D) 9)00 percent 
E) None of the choices are correct

Question 14

Which of the following is true regarding real property taxes and personal property taxes?

Accepted Answer

A) Personal property taxes are assessed on permanent structures and land. 
B) Real property taxes are assessed on cars and boats. 
C) All U.S. states currently impose personal property taxes. 
D) Real property taxes are generally easier to administer than personal property taxes. 
E) None of the choices are correct. 
A) Personal property taxes are assessed on permanent structures and land. 
B) Real property taxes are assessed on cars and boats. 
C) All U.S. states currently impose personal property taxes. 
D) Real property taxes are generally easier to administer than personal property taxes. 
E) None of the choices are correct.

The effective tax rate expresses the taxpayer's total tax as a percentage of the taxpayer's taxable and nontaxable income.

The main difficulty in calculating an income tax is determining the correct amount of the tax base.

One key characteristic of a tax is that it is a required payment to a governmental agency.

Earmarked taxes are:

Relative to explicit taxes, implicit taxes are much easier to estimate.

Manny, a single taxpayer, earns $65,000 per year in taxable income and an additional $12,000 per year in city of Boston bonds. What is Manny's current marginal tax rate for 2020? (Use tax rate schedule.)

The income and substitution effects are two opposing effects that one could consider in static forecasting.

To calculate a tax, you need to know: I. the tax base II) the taxing agency III) the tax rate IV) the purpose of the tax

Which of the following is true regarding real property taxes and personal property taxes?

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Dependents, and Filing Status

Gross Income and Exclusions

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters

Exam 1: An Introduction to Tax

The effective tax rate expresses the taxpayer's total tax as a percentage of the taxpayer's taxable and nontaxable income.

The main difficulty in calculating an income tax is determining the correct amount of the tax base.

One key characteristic of a tax is that it is a required payment to a governmental agency.

Earmarked taxes are:

Relative to explicit taxes, implicit taxes are much easier to estimate.

Manny, a single taxpayer, earns $65,000 per year in taxable income and an additional $12,000 per year in city of Boston bonds. What is Manny's current marginal tax rate for 2020? (Use tax rate schedule.)

The income and substitution effects are two opposing effects that one could consider in static forecasting.

To calculate a tax, you need to know: I. the tax base II) the taxing agency III) the tax rate IV) the purpose of the tax

Which of the following is true regarding real property taxes and personal property taxes?

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Dependents, and Filing Status

Gross Income and Exclusions

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters