Sample+Exam - 1 328: Introduction to Taxation Dr. Kulsrud...

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328: Introduction to Taxation Name___________________________ Dr. Kulsrud Sample Exam Chapters 1-5 EXAM #1 INSTRUCTIONS Make sure you have xx pages, including this page. The exam consists of short answer, multiple choice and true-false questions. The exam contains xxx points. Show all work for partial credit. Note : Answer all questions using l994 amounts for the standard deduction, personal exemption, etc. . Personal exemption $2,450 Standard deduction: single $3,800; married joint return $6,350. Exemption phase-out: single $111,800; married joint return $167,700 3% cutback: $111,800 MARRIED FILING JOINTLY AND QUALIFYING WIDOWS AND WIDOWERS If taxable income is Of the Over But not over Tax liability Amount over $ 0 $ 38,000 15% $ 0 38,000 91,850 $5,700 + 28% 38,000 91,850 140,000 20,778 + 31% 91,850 140,000 250,000 35,704 + 36% 140,000 250,000 75,304 + 39.6% 250,000 Good Luck! May the Code be with you J 1
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A328: Introduction to Taxation Name________________________ Sample Exam #1 (Chapters 1-5) COMMENTS Your exam will consist of short answer, multiple choice and true-false questions. You should show all work for partial credit. The following are some questions from old exams on Chapters 1-5. These questions are intended to give you a sense not necessarily of what will be on the exam but the types of questions that you can expect . When looking over the questions remember that the law has changed over the years and in different classes I have emphasized different points. 1. (2 points) In the popular sense, a sales tax (e.g., a 5% tax imposed on all purchases) is a. progressive b. regressive c. proportional d. none of the above Answer: b. As the taxpayer’s ability to pay increases, the percentage of any flat tax that is paid becomes smaller and smaller. 2. (3 pts) R's is currently in the 33 percent "bracket" for tax purposes. Assuming that his income increases this year by $4,000 of interest income from state of Indiana bonds, indicate the effect on the following (i.e., increase, decrease, no change) a. Marginal tax rate ____________ b. Average tax rate ____________ c. Effective tax rate ____________ a. No change since the income is tax-exempt b. No change since neither the numerator (tax) or the denominator (taxable income) change. c. Decrease since the tax remains the same but the denominator (total economic income) increases. 3. (3 pts) Define horizontal equity. Taxpayers in similar situations pay the same tax. 4. (3 pts) Early in the 1960s, a new national party, the Constitutional Party, was formed. Its principal platform was elimination of the federal income tax and substitution of a general sales tax and beneficiary charges. On what grounds could such a movement be criticized? Sales taxes are regressive and fall hardest upon the poor.
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Sample+Exam - 1 328: Introduction to Taxation Dr. Kulsrud...

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