Quiz for Part 1


1	A taxpayer is any person or organization required to pay a tax. In the United States a person refers to individuals and corporations
		A)	TRUE
		B)	FALSE


2	Tax base refers to the lowest marginal tax rate applied to taxable income.
		A)	TRUE
		B)	FALSE


3	The incidence of a tax is always born by the person or organization making a direct payment to the taxing authority.
		A)	TRUE
		B)	FALSE


4	A tax differs from a fine or penalty because a tax is not intended to deter or punish unacceptable behavior.
		A)	TRUE
		B)	FALSE


5	A sales tax is a prime example of an activity based tax.
		A)	TRUE
		B)	FALSE


6	A tax is considered sufficient if it generates enough funds to pay for the goods and services provided by the government levying the tax.
		A)	TRUE
		B)	FALSE


7	The income effect of a tax rate increase occurs when taxpayers decides to work less hours and therefore receive less income.
		A)	TRUE
		B)	FALSE


8	A taxpayer's marginal tax rate is the rate that applies to the next dollar of taxable income.
		A)	TRUE
		B)	FALSE


9	In theory a progressive tax rate structure that increases tax rates as income increases results in an equality of sacrifice across taxpayers.
		A)	TRUE
		B)	FALSE


10	A regressive tax rate structure results in same tax rate being applied regardless of changes in taxable income.
		A)	TRUE
		B)	FALSE

2002 McGraw-Hill Higher Education
Any use is subject to the Terms of Use and Privacy Policy.
McGraw-Hill Higher Education is one of the many fine businesses of The McGraw-Hill Companies.