Question :
1) A tax that takes a higher percentage of income : 1384329
1) A tax that takes a higher percentage of income as income rises is called a(n)
A) proportional tax.
B) regressive tax.
C) progressive tax.
D) excise tax.
E) value-added tax.
2) The sometimes proposed “flat tax,” such as one that takes 15% of income at all levels of income, is an example of a(n)
A) proportional tax.
B) regressive tax.
C) progressive tax.
D) excise tax.
E) value-added tax.
3) Which of the following statements suggests that property taxes might be progressive?
A) The proportion of income spent on housing tends to decline as income rises.
B) Higher-income people live in more expensive houses than do low-income people.
C) A large part of the property tax is shifted to renters, who typically have lower incomes than owners.
D) Inner city neighbourhoods often have higher property taxes than do the more affluent suburbs.
E) Elderly pensioners often live in their family homes after children have left.
4) A mandatory health-insurance premium of a given amount payable by all residents is an example of a(n)
A) proportional tax.
B) regressive tax.
C) progressive tax.
D) value-added tax.
E) invisible tax.
5) An income tax is progressive if, as income increases,
A) its average tax rate is increasing.
B) its marginal tax rate is falling.
C) its average tax rate is falling, but total taxes are increasing.
D) its average tax rate and marginal tax rate are constant while income is increasing.
E) its average tax rate is falling, but the marginal tax rate is increasing.
6) A tax that takes a smaller percentage of income as the income increases is called
A) a regressive tax.
B) a progressive tax.
C) a proportional tax.
D) an efficient tax.
E) an excise tax.
7) Which of the following is required to achieve progressivity for a particular tax?
A) A marginal tax rate equal to the average tax rate (implying that the average tax rate is rising with income)
B) A marginal tax rate equal to the average tax rate (implying that the average tax rate is falling with income)
C) An average tax rate above the marginal tax rate (implying that the average tax rate is falling with income)
D) A marginal tax rate above the average tax rate (implying that the average tax rate is rising with income)
E) A constant tax rate for all incomes
8) Consider an income-tax system that requires all individuals to pay exactly 3% of their income. This income-tax system is
A) proportional.
B) progressive, because the higher the individual’s income, the greater the amount of tax paid.
C) regressive, since 3% is harder to pay for a low-income taxpayer.
D) fair, since everyone pays the same amount.
E) a lump-sum system, sometimes called a poll tax.
9) Suppose taxes are levied in the following way. No individual pays any taxes on the first $10 000 of their income. And for every dollar earned above this amount, all individuals pay 20% in taxes. This income-tax system is
A) regressive.
B) progressive.
C) indexed.
D) proportional.
E) an accurate description of the Canadian system.
10) Suppose taxes are levied in the following way. All individuals pay a tax equal to $2000 no matter what income they earn. In addition, all individuals pay 20% of all their earned income in taxes. This income-tax system is
A) regressive.
B) progressive.
C) indexed.
D) proportional.
E) an accurate description of the Canadian system.
