Quiz_186.pdf - 74 Horizontal equity means that two people in identical economic situations should pay the same amount of taxes Answer True 74 False Diff

Quiz_186.pdf - 74 Horizontal equity means that two people...

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74) Horizontal equity means that two people in identical economic situations should pay the same amount of taxes. 74) Answer: True False Diff: 1 Page Ref: 593/593 Topic: Horizontal - Equity Principle Learning Outcome: Micro 24: Explain the basic principles of tax policies and the tax system AACSB: Reflective Thinking 75) The government of Silverado raises revenue to operate the city ʹ s hospital, open to all residents, through a general income tax paid by its residents. This method of raising revenue is consistent with the benefits - received principle. 75) Answer: True False Diff: 2 Page Ref: 594/594 Topic: Benefits - Received Principle Learning Outcome: Micro 24: Explain the basic principles of tax policies and the tax system AACSB: Reflective Thinking 76) Exempting food purchases from sales tax is consistent with the ability - to - pay principle, although not necessarily consistent with vertical equity. 76) Answer: True False Diff: 3 Page Ref: 593/593 Topic: Ability - to - Pay Principle Learning Outcome: Micro 24: Explain the basic principles of tax policies and the tax system AACSB: Reflective Thinking SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 77) If you pay $3,000 in taxes on an income of $28,000, and $4,450 in taxes on an income of $38,000, what is your marginal tax rate? Show your work. 77) Answer: Marginal tax rate = ($4,450 - $3,000)/($38,000 - $28,000) = 0.145 or 14.5 percent. Diff: 2 Page Ref: 590/590 Topic: Tax Rates Learning Outcome: Micro 24: Explain the basic principles of tax policies and the tax system AACSB: Analytic Skills 78) If your income is $40,000 and you pay taxes of $4,650, what is your average tax rate? Show your work. 78) Answer: Average tax rate = $4,650/$40,000 = 0.11625 or 11.625 percent. Diff: 2 Page Ref: 590/590 Topic: Tax Rates Learning Outcome: Micro 24: Explain the basic principles of tax policies and the tax system AACSB: Analytic Skills 21 This study resource was shared via CourseHero.com
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