Many economists believe that the U.S. tax system would be more efficient if the basis of taxation were changed so that people paid taxes, more so than they do now, based on

their spending rather than their income.

Tax avoidance is legal, whereas tax evasion is illegal.

The 3 largest categories of spending by the Federal government in order from first to third would be

Social Security, national defense, and income security.

Horizontal equity in taxation refers to the idea that people

in equal conditions should pay equal taxes.

Which of the following is NOT true about government spending on national defense?

It is not financed with tax revenue.

Suppose the government taxes 30% of the first $70K and 50% of all income above $70K. for a person earning $100K, the marginal tax rate is

50% and the average tax rate is 36%.

A value-added tax or VAT is a tax on

all stages of production of a good.

A payroll tax is a tax on

the wages that a firm pays its workers.

Help

Options

focusNode

Didn't know it?
click below

Knew it?
click below

Don't Know

Remaining cards (0)

Know

retry

shuffle

restart

0:00

Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

Normal Size Small Size show me how

ECON2302 - KC - Ch12

Economics Chapter 12 review

Question	Answer
In practice, the U.S. income tax system is filled with special provisions that alter a family's tax based on its specific circumstances. True or false?	TRUE
Many economists believe that the U.S. tax system would be more efficient if the basis of taxation were changed so that people paid taxes, more so than they do now, based on	their spending rather than their income.
The average American pays a higher percentage of his income in taxes today that he would have in the late 18th century. True or false?	TRUE
Which is correct?	Tax avoidance is legal, whereas tax evasion is illegal.
Sue earns income of $80K/yr. Her average tax is 50%. Sue paid $5k in taxes on the first $30k she earned. What was the marginal tax rate on the first $30k, and what was the marginal tax rate on the remaining $50k?	16.67% and 70% respectively.
Horizontal equity refers to a tax system in which individuals with higher incomes pay more in taxes than individuals with lower incomes. True or false?	FALSE
The 3 largest categories of spending by the Federal government in order from first to third would be	Social Security, national defense, and income security.
Horizontal equity in taxation refers to the idea that people	in equal conditions should pay equal taxes.
The U.S. federal government collects about 1/2 of the taxes in our economy. True or false?	FALSE
Which of the following is NOT true about government spending on national defense?	It is not financed with tax revenue.
Suppose the government taxes 30% of the first $70K and 50% of all income above $70K. for a person earning $100K, the marginal tax rate is	50% and the average tax rate is 36%.
Which type of tax is used to finance the Social Security program in the United States?	payroll tax
The equity of a tax system concerns whether the tax burden is distributed equally among the population. True or false?	FALSE
A value-added tax or VAT is a tax on	all stages of production of a good.
A tax system exhibits vertical equity when taxpayers with similar abilities to pay contribute the same amount. True or false?	FALSE
A payroll tax is a tax on	the wages that a firm pays its workers.

Created by: debra473

"Know" box contains:
Time elapsed:
Retries: