Macro Quiz 2 review shtuff

The "ability-to-pay" principle of taxation is the normative idea that (1) an equitable tax system is one in which high income individuals should bear a greater burden of taxes than low income individuals. (2) each individual should voluntarily contribute according to her ability to pay taxes. (3) progressive taxes are more equitable than regressive taxes. (4) two individuals earning the same income should have equal ability to pay, all else constant. (5) an equitable tax system is one in which all citizens should bear a burden of taxes equally.

(1) an equitable tax system is one in which high income individuals should bear a greater burden of taxes than low income individuals.

Exemptions and deductions are used (1) to add to taxes that must be paid. (2) by taxpayers to reduce the amount of income subject to tax. (3) to determine the type of tax structure. (4) to determine what items are subject to sales taxes. (5) To reduce taxes only by the rich people

(2) by taxpayers to reduce the amount of income subject to tax.

The idea that two taxpayers in the same economic circumstances should pay the same level of taxes is known as the (1) ability-to-pay principle. (2) vertical-equity principle. (3) horizontal-equity principle. (4) benefits-received principle.

(3) horizontal-equity principle.

What are the two types of taxes that working individuals pay on their earnings? (1) individual income tax and sales tax (2) payroll tax and sales tax (3) individual income tax and social insurance taxes (4) property tax and payroll tax (5) sales tax and income tax

(3) individual income tax and social insurance taxes

Public schools in the United States get most of their operating funds from (1) government production and subsidies. (2) income taxes on corporate profits. (3) local property taxes. (4) tariffs collected on imported goods. (5) Income tax.

(3) local property taxes.

If, as your taxable income decreases, you pay a smaller percentage of your taxable income in taxes, then the tax is (1) regressive. (2) proportional. (3) progressive. (4) unfair. (5) Flat.

(3) progressive.

A personal exemption refers to (1) the range, from the high to the low tax rate, of a particular type of tax. (2) the tax rate that applies to a particular tax bracket. (3) the tax bracket that represents basic living expenses. (4) an amount representing basic living expenses that can be subtracted from income. (5) a dispensation that allows certain qualifying individuals not to pay federal taxes.

(4) an amount representing basic living expenses that can be subtracted from income.

Tax laws affect (1) economic efficiency but not equity. (2) equity but not economic efficiency. (3) consumption and production, not efficiency and equity. (4) both efficiency and equity.

(4) both efficiency and equity.

Gasoline taxes that are typically used for highway construction and maintenance are consistent with which of the following principles of taxation? (1) the ability-to-pay principle (2) progressive tax principle (3) the horizontal-equity principle (4) the vertical-equity principle (5) the benefits-received principle

(5) the benefits-received principle