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Chapter12 - Chapter12 MULTIPLECHOICE 1 a...

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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. ANSWER: c. As a nation gets richer, the government typically takes a larger share of income in taxes. TYPE: M SECTION: 1 DIFFICULTY: 2 2. In 1789 the average American paid what percent of his income in taxes? 3. Over the past 100 years, as the economy’s income has grown, 4. Who said, ”in this world nothing is certain but death and taxes”? 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 ANSWER: d. individual income tax, payroll tax, corporate income tax, excise tax TYPE: M SECTION: 1 DIFFICULTY: 2 81
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82 Chapter 12/The Design of the Tax System 6. Rate these taxes to the Federal government from most to least important.
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