Question 1

Which of the following is true?

Accepted Answer

A) A regressive tax rate structure imposes an increasing marginal tax rate as the tax base increases. 
B) Regressive tax structures are the most common tax rate structure. 
C) An example of a regressive tax is an excise tax. 
D) In terms of effective tax rates, a sales tax can be viewed as a regressive tax. 
E) None of the choices are correct.

Question 2

Given the following tax structure, what is the minimum tax that would need to be assessed on Lizzy to make the tax progressive with respect to average tax rates? What is the minimum tax that would need to be assessed on Lizzy to make the tax progressive with respect to effective tax rates?

Accepted Answer

The answer of Given the following tax structure, what is...

Question 3

Oswald is beginning his first tax course and does not really have a solid understanding of the role that taxes play in various decisions. Please describe for Oswald the various types of decisions that taxes may influence.

Accepted Answer

The answer of Oswald is beginning his first tax course...

Question 4

Manny, a single taxpayer, earns $65,000 per year in taxable income and an additional $12,000 per year in city of Boston bonds. If Manny earns an additional $35,000 in taxable income in 2019, what is his marginal tax rate (rounded)on this income? (Use tax rate schedule.)

Accepted Answer

A) 18.01 percent 
B) 22.00 percent 
C) 22.90 percent 
D) 24.00 percent 
E) None of the choices are correct

Question 5

Consider the following tax rate structure. Is it horizontally equitable? Why or why not? Is it vertically equitable? Why or why not?

Accepted Answer

The answer of Consider the following tax rate structure. Is...

Question 6

A use tax is typically imposed by a state on goods purchased within the state.

Accepted Answer

A) True 
 B)False

Question 7

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.

Question 8

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 2019? (Use tax rate schedule.)

Accepted Answer

A) 11.40 percent 
B) 12.00 percent 
C) 13.19 percent 
D) 15.63 percent 
E) None of the choices are correct.

Question 9

Jackson has the choice to invest in city of Mitchell bonds or Sundial, Inc. corporate bonds that pay 10 percent interest. Jackson is a single taxpayer who earns $55,000 annually. Assume that the city of Mitchell bonds and the Sundial, Inc. bonds have similar risk. What interest rate would the city of Mitchell have to pay in order to make Jackson indifferent between investing in the city of Mitchell and the Sundial, Inc. bonds for 2019? (Use tax rate schedule.)

Accepted Answer

A) 7)80 percent 
B) 10.00 percent 
C) 8)00 percent 
D) 7)20 percent 
E) None of the choices are correct

Question 10

The effective tax rate, in general, provides a better depiction of a taxpayer's tax burden than the average tax rate.

Accepted Answer

A) True 
 B)False

Question 11

Although the primary purpose of a tax system is to raise revenue, Congress uses the federal tax system for other purposes as well. Describe the other ways in which Congress uses the federal tax system. Be specific.

Accepted Answer

The answer of Although the primary purpose of a tax...

Question 12

Geronimo files his tax return as a head of household for year 2019. If his taxable income is $72,000, what is his average tax rate (rounded)? (Use tax rate schedule.)

Accepted Answer

A) 14.28 percent 
B) 6)31 percent 
C) 19.08 percent 
D) 22.00 percent 
E) None of the choices are correct

Question 13

Marc, a single taxpayer, earns $60,000 in taxable income and $5,000 in interest from an investment in city of Birmingham bonds. Using the U.S. tax rate schedule for 2019, how much federal tax will he owe? (Round your final answer to the nearest whole dollar.)(Use tax rate schedule.)

Accepted Answer

A) $13,200 
B) $9,059 
C) $7,638 
D) $6,812 
E) None of the choices are correct

Exam 1: An Introduction to Tax