12 - Chapter 12 The Design of the Tax System MULTIPLE...

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Chapter 12 The Design of the Tax System MULTIPLE CHOICE 1 . Which of the following statements is most correct? a. As a nation gets richer, the government has larger tax revenue, but typically takes a smaller share of income in taxes. b. Poor countries usually have relatively large tax burdens. c. As a nation gets richer, the government typically takes a larger share of income in taxes. d. There is little evidence of a relationship between income and taxes for most countries. 2 . In 1789 the average American paid what percent of his income in taxes? a. approximately 2 percent. b. approximately 5 percent. c. approximately 10 percent. d. approximately 25 percent. 3 . Over the past 100 years, as the economy’s income has grown, a. tax rates, as a percentage of total income have fallen. b. tax revenues, as a percentage of total income have fallen. c. household after-tax income has fallen. d. the government has grown even more. 4 . Who said, ”in this world nothing is certain but death and taxes”? a. Mark Twain b. P.T. Barnum c. Ben Franklin d. Richard Nixon 5 . The U.S. federal government collects taxes in a number of ways. Rank the following sources of revenue from largest to the  smallest. a. corporate income tax, social security tax, personal income tax, import tax b. estate tax, corporate income tax, excise tax, individual income tax c. corporate income tax, payroll tax, individual income tax, excise tax d. individual income tax, payroll tax, corporate income tax, excise tax 6 . Rate these taxes to the Federal government from most to least important. a. individual income taxes, Social insurance taxes, Corporate income taxes b. Social insurance taxes, Corporate income taxes, individual income taxes c. Corporate income taxes, individual income taxes, Social insurance taxes d. Corporate income taxes, Social insurance taxes, individual income taxes 7 . Most people agree that the tax system a. should be both efficient and equitable. b. cannot raise enough revenue to cover government expenditures. c. could raise more revenue if tax rates were lowered. d. should be rewritten to require everyone to pay the same percentage of their income to taxes. 8 . Deadweight losses occur in markets in which a. firms decide to downsize. b. the government imposes a tax. c. profits fall because of low consumer demand. d. equilibrium price rises, causing a loss in consumer surplus.
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9 . Which of the following countries has the largest tax burden? a.
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This note was uploaded on 07/23/2009 for the course BUS BUS217 – taught by Professor Staff during the Spring '09 term at California Baptist University.

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12 - Chapter 12 The Design of the Tax System MULTIPLE...

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