Exam 18: Taxation and Resource Allocation

The burden of the payroll tax falls entirely on the employee regardless of how it is formally divided between employer and employee if the

Since the early 1970s,state and local taxes have remained relatively constant as a percentage of GDP.

What is the controversy surrounding property taxes as a source for school funding?

Excise taxes are a form of sales tax.

Federal tax loopholes in personal income tax provide benefits only to very high-income people.

An excise tax

All states have income taxes.

Which of the following situations is a clear application of the benefits principle of taxation?

In the area of taxation,the trade-off between equity and efficiency

A progressive income tax system can be defined as one in which

The benefits principle states that the users of a service should pay for that service.

In practice,turning horizontal and vertical equity into tax law

The money for Social Security payments to current retirees comes from

The incidence of a payroll tax is borne by both employers and employees.

A comprehensive income tax with few loopholes is efficient because labor

Officially,the payroll tax is referred to as

Horizontal equity means that equally situated individuals should be taxed equally.

Members of the European Union (EU),rely heavily on this form of indirect taxes.

Which of the following is an example of a direct tax?

The individual income tax,the inheritance tax,and the head tax are all examples of direct taxes.