Question :
Table 18-5
Taxable Income
Tax Payments
$20,000
: 1388018
Table 18-5
Taxable Income
Tax Payments
$20,000
$2,000
25,000
2,250
32,000
2,560
42,000
2,940
Table 18-5 shows the amount of taxes paid on various levels of income.
14) Refer to Table 18-5. The tax system is
A) progressive throughout all levels of income.
B) proportional throughout all levels of income.
C) regressive throughout all levels of income.
D) regressive between $20,000 and $25,000 of income and progressive between $32,000 and $42,000.
Table 18-6
Income Tax Bracket
Marginal Tax Rate
$0 – 8,000
12%
8,001 – 22,000
17%
22,001 – 48,000
25%
48,001 and over
38%
Table 18-6 shows the income tax brackets and tax rates for single taxpayers in Calpernia.
15) Refer to Table 18-6. Calculate the income tax paid by Sasha, a single taxpayer with an income of $60,000.
A) $22,800
B) $14,399
C) $13,800
D) $13,642
16) Refer to Table 18-6. Sasha is a single taxpayer with an income of $60,000. What is his marginal tax rate and what is his average tax rate?
A) marginal tax rate = 38%; average tax rate = 23%
B) marginal tax rate = 17%; average tax rate = 21%
C) marginal tax rate = 38%; average tax rate = 24%
D) marginal tax rate = 23%; average tax rate = 38%
17) The largest percentage of federal income tax revenue in the United States is paid by the
A) lowest income taxpayers.
B) middle income taxpayers.
C) highest income taxpayers.
D) All groups of taxpayers—low income, high income and middle income—pay the same percent of federal income taxes.
18) An average tax rate is calculated as
A) total taxable income × taxes paid.
B) total taxable income ÷ taxes paid.
C) taxes paid ÷ total taxable income.
D) (total taxable income – taxes paid) ÷ taxable income.
19) A marginal tax rate is calculated as
A) total taxable income ÷ by taxes paid.
B) taxes paid ÷ total taxable income.
C) change in taxes paid ÷ the change in total taxable income.
D) change in taxable income ÷ change in taxes paid.
20) A marginal tax rate is
A) the fraction of income that must be paid in taxes.
B) the fraction of each additional dollar of income that must be paid in taxes.
C) the incremental income one must earn to offset each additional dollar of tax.
D) the ratio of a change in income to a change in taxes paid.
21) If the marginal tax rate is less than the average tax rate as taxable income increases, the tax structure is
A) regressive.
B) proportional.
C) progressive.
D) unfair.
22) If the marginal tax rate is equal to the average tax rate as taxable income increases, the tax structure is
A) regressive.
B) proportional.
C) progressive.
D) unfair.
23) Policymakers focus on marginal tax rate changes when making changes in the tax code because the marginal tax rate
A) determines how tax revenue will change as national income increases.
B) affects people’s willingness to work, save, and invest.
C) always equals the average tax rate which is harder to measure.
D) determines how much revenue the government will have to spend.
