ACCT 351. Review for Quiz 1, spring 2017 . CHAPTER 1Average and effective and marginal tax rates, definition and computations.
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What is a proportional, progressive, regressive tax? Proportional tax ( flat tax): imposes a constant tax rate throughout the tax base Progressive tax: increasing marginal tax rate as the tax base increases Regressive tax: decreasing marginal tax rate as the tax base increase. Sales tax is regressivewhen viewed in terms of effective tax rate. (e.g., Example 1-9). For following types of tax, know what they are and whether they are administered by Federal or State government or a county government. Federal income taxes: individual ic taxes were 46.2% of Federal Government Rev Corporate ic taxes constituted 10.6% of total revenue. Employment or FICA taxes-SSN tax (6.2%) & Medicare tax (1.45%) Unemployment tax - 7k reach ceiling Gift tax (40% - 2016)and estate taxes (death tax) : based on fair market value. Gift tax paid by donor and estate taxes are payable out of the estate ( not by the recipient of estate). Annual gift exclude 14k. Total estate and gifts not exceeding 5,450,000 is exempt State income tax and property tax - tax base is the fair market value of the property Sales tax. Evaluate tax system. Briefly review the meaning of Sufficiency:the aggregate size of the tax revenues must be sufficient to pay for projected government expenses. Precisely estimating and matching governmental expenditures with tax revenues is nearly impossible since revenues and expenses are influenced by the national events, the economy, health care..
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