Question :
51) Consider the concept of equity in taxation. What the : 1384334
51) Consider the concept of equity in taxation. What is the “benefit principle”?
A) the main principle on which all tax systems are based
B) the main principle on which the Canadian tax system is based
C) the principle that users of public goods are taxed in proportion to their use of them
D) the principle that users of public goods are taxed in proportion to their ability to pay
E) the main principle on which horizontal equity is based
52) If one was concerned only with satisfying the “benefit principle,” the ideal tax would be a(n)
A) income tax.
B) surcharge tax.
C) sales tax.
D) user charge.
E) proportional income tax.
53) Which of the following is an example of a tax that is designed according to the “benefit principle”?
A) a metered water tax
B) school tax (based on property value)
C) a provincial sales tax
D) value-added tax
E) federal income tax
54) Suppose a Canadian Member of Parliament suggests that people with the ability to pay higher taxes should do so. This refers to the concept of
A) equality of outcomes.
B) horizontal equity.
C) vertical equity.
D) proportionality.
E) the benefit principle.
55) Suppose a Canadian Member of Parliament suggests that people with the same total income should pay the same taxes, no matter the source of their income. This refers to the concept of
A) equality of outcomes.
B) horizontal equity.
C) vertical equity.
D) proportionality.
E) the benefit principle.
56) Consider two families, each of whom earn total income of $80 000, but that are different in many other respects. If each family is assessed income tax payable of $14 749, then it is very likely that the principle of ________ is being violated.
A) progressivity
B) horizontal equity
C) vertical equity
D) ability to pay
E) proportionality
57) The direct burden of a tax is
A) directly proportional to average income.
B) always progressive.
C) always regressive.
D) a tax-deductible expense for the person who pays the tax.
E) the total revenue collected by the tax.
58) The excess burden of a tax
A) is the incidence of a tax.
B) is the deadweight loss created by the tax.
C) increases economic efficiency by eliminating distortions in the economy.
D) is always progressive.
E) is always regressive.
59) The two main competing goals in the design of a tax system are
A) efficiency and productivity.
B) efficiency and equity.
C) efficiency and the elimination of distortions.
D) applying the direct and excess burden of taxes evenly.
E) growth and productivity.
60) An important objective in designing a tax system is to
A) design a system that minimizes inefficiency for a given amount of revenue raised.
B) design a system that raises the revenue required for the government’s debt-service obligations.
C) raise the maximum possible revenue.
D) not intervene in the market economy because this only causes inefficiencies.
E) eliminate all deadweight loss.
