Question 1

What are tax systems that impose record keeping requirements on taxpayers said to have

Accepted Answer

A)  an auditing burden
B)  a lower incidence of compliance
C)  an administrative burden
D)  a certification requirementE) A) and D)
F) All of the above

Question 2

Not all provinces have sales taxes.

Accepted Answer

A) True 
 B)False

Question 3

List the three most important expenditure programs of the federal government.How do these differ from the three most important expenditure programs of provincial and local governments
 Explain why it makes more sense for the federal government to purchase "national defence" rather than provincial governments.

Accepted Answer

Federal government: CHST,Old Age Securit...

Question 4

What happens as government debt increases

Accepted Answer

A)  Evidence suggests that spending on social insurance programs will be reduced.
B)  Government must spend a larger share of its revenue on interest payments.
C)  A trade-off with government deficits is inevitable.
D)  Taxes must rise to cover the deficit.E) B) and D)
F) All of the above

Question 5

When a tax does not have a deadweight loss,the reduction in surplus is exactly offset by tax revenue collected by the government.

Accepted Answer

A) True 
 B)False

Question 6

What is the marginal tax rate for a lump-sum tax

Accepted Answer

A)  always positive
B)  always negative
C)  zero
D)  can take on any value, but must always lie above the average taxE) B) and C)
F) A) and D)

Question 7

What happens if people do most of their saving through RRSP accounts

Accepted Answer

A)  Their tax bill will reflect a lower return on savings than would otherwise be the case.
B)  Their tax bill is largely based on consumption rather than income.
C)  Even though taxes are deferred to some later date, their after-tax lifetime income is unchanged.
D)  Tax-deferred savings plans will increase tax equity.E) C) and D)
F) None of the above

Question 8

Tax loopholes often arise from ambiguities or omissions in the tax laws.

Accepted Answer

A) True 
 B)False

Question 9

Which tax systems is most fair

Accepted Answer

A)  Low-income taxpayers pay a smaller amount of tax.
B)  High-income taxpayers pay a larger fraction of their income.
C)  All taxpayers pay the same fraction of income.
D)  There is no objective way to assess fairness.E) A) and D)
F) None of the above

Question 10

In which markets do deadweight losses occur

Accepted Answer

A)  markets in which firms decide to downsize
B)  markets in which the government imposes a tax
C)  markets in which profits fall because of low consumer demand
D)  markets in which equilibrium price rises, causing a loss in consumer surplusE) B) and C)
F) None of the above

Question 11

Why is corporate tax popular among voters but economists believe consumers and workers bear most of the tax

Accepted Answer

The corporate income tax shows how dange...

Question 12

What is the tax that generates the most revenue for provincial and local governments

Accepted Answer

A)  corporate income tax
B)  personal income tax
C)  property tax
D)  excise taxE) B) and C)
F) None of the above

Question 13

What is the benefits principle used to justify

Accepted Answer

A)  property taxes
B)  the gasoline tax
C)  taxes on cigarettes and alcoholic beverages
D)  personal income taxesE) B) and C)
F) A) and B)

Question 14

Two families who live in Wawa have identical incomes.The Smiths deduct $5000 from their taxable income for child support interest paid during the year,while the Jones family is not eligible for this deduction.What does this situation exemplify

Accepted Answer

A)  an application of the benefits principle of taxation
B)  a violation of horizontal equity
C)  a violation of vertical equity
D)  an application of egalitarian tax rulesE) C) and D)
F) B) and D)

Question 15

In order to construct a more complete picture of the economic burden of government across income classes,what do economists usually do

Accepted Answer

A)  include both tax payments and transfer payments received
B)  focus only on the tax payments of wealthy taxpayers
C)  limit their analysis to taxes based on the ability-to-pay principle
D)  focus their analysis on issues of tax efficiencyE) B) and D)
F) C) and D)

Question 16

How does one calculate personal income taxes

Accepted Answer

A)  It is based on a person's taxable income and a tax schedule.
B)  It is largely unaffected by deductions.
C)  It is the person's total income minus tax credits.
D)  It is some constant percentage of income.E) All of the above
F) None of the above

Question 17

How is the incidence of a tax determined

Accepted Answer

A)  It is not required when one is only interested in issues of equity.
B)  It is identical to the determination of legal liability for a tax.
C)  It requires one to evaluate where the tax burden eventually falls.
D)  It is solely determined by conditions of the "flypaper theory" of taxation.E) None of the above
F) C) and D)

Question 18

Table 12-2
 
-Refer to Table 12-2.If the price of a weekend ski pass is $138 and this price reflects the actual unit cost of providing a weekend of skiing,how much consumer surplus accrues to Allyn and Greg,respectively

Accepted Answer

A)  $37 and $17
B)  $47 and $27
C)  $49 and $35
D)  $85 and $65E) A) and D)
F) None of the above

Question 19

The most important taxes for the federal government are individual income taxes and corporate income taxes.

Accepted Answer

A) True 
 B)False

Question 20

What is NOT a reason that a lump-sum tax imposes a minimal administrative burden on taxpayers

Accepted Answer

A)  Everyone can easily compute the amount of tax they owe.
B)  There is no benefit to hiring an accountant to do your taxes.
C)  Everyone owes the same amount of tax, regardless of earnings.
D)  There is no deadweight loss.E) C) and D)
F) A) and D)

Exam 12: The Design of the Tax System

What is NOT a reason that a lump-sum tax imposes a minimal administrative burden on taxpayers

Correct Answer
verified

Correct Answer
verified
Federal government: CHST,Old Age Securit...
View Answer

What happens as government debt increases

Correct Answer
verified

Tax loopholes often arise from ambiguities or omissions in the tax laws.

Correct Answer
verified

Not all provinces have sales taxes.

Correct Answer
verified

How is the incidence of a tax determined

Correct Answer
verified

In order to construct a more complete picture of the economic burden of government across income classes,what do economists usually do

Correct Answer
verified

What are tax systems that impose record keeping requirements on taxpayers said to have

Correct Answer
verified

Two families who live in Wawa have identical incomes.The Smiths deduct $5000 from their taxable income for child support interest paid during the year,while the Jones family is not eligible for this deduction.What does this situation exemplify

Correct Answer
verified

What is the tax that generates the most revenue for provincial and local governments

Correct Answer
verified

When a tax does not have a deadweight loss,the reduction in surplus is exactly offset by tax revenue collected by the government.

Correct Answer
verified

In which markets do deadweight losses occur

Correct Answer
verified

What is the benefits principle used to justify

Correct Answer
verified

What happens if people do most of their saving through RRSP accounts

Correct Answer
verified

How does one calculate personal income taxes

Correct Answer
verified

Why is corporate tax popular among voters but economists believe consumers and workers bear most of the tax

Correct Answer
verified
The corporate income tax shows how dange...
View Answer

Table 12-2 -Refer to Table 12-2.If the price of a weekend ski pass is $138 and this price reflects the actual unit cost of providing a weekend of skiing,how much consumer surplus accrues to Allyn and Greg,respectively

Correct Answer
verified

What is the marginal tax rate for a lump-sum tax

Correct Answer
verified

Which tax systems is most fair

Correct Answer
verified

The most important taxes for the federal government are individual income taxes and corporate income taxes.

Correct Answer
verified

Exam 12: The Design of the Tax System

What is NOT a reason that a lump-sum tax imposes a minimal administrative burden on taxpayers

Correct AnswerverifiedShow Answer

Correct AnswerverifiedFederal government: CHST,Old Age Securit...View AnswerShow Answer

What happens as government debt increases

Correct AnswerverifiedShow Answer

Tax loopholes often arise from ambiguities or omissions in the tax laws.

Correct AnswerverifiedShow Answer

Not all provinces have sales taxes.

Correct AnswerverifiedShow Answer

How is the incidence of a tax determined

Correct AnswerverifiedShow Answer

In order to construct a more complete picture of the economic burden of government across income classes,what do economists usually do

Correct AnswerverifiedShow Answer

What are tax systems that impose record keeping requirements on taxpayers said to have

Correct AnswerverifiedShow Answer

Two families who live in Wawa have identical incomes.The Smiths deduct $5000 from their taxable income for child support interest paid during the year,while the Jones family is not eligible for this deduction.What does this situation exemplify

Correct AnswerverifiedShow Answer

What is the tax that generates the most revenue for provincial and local governments

Correct AnswerverifiedShow Answer

When a tax does not have a deadweight loss,the reduction in surplus is exactly offset by tax revenue collected by the government.

Correct AnswerverifiedShow Answer

In which markets do deadweight losses occur

Correct AnswerverifiedShow Answer

What is the benefits principle used to justify

Correct AnswerverifiedShow Answer

What happens if people do most of their saving through RRSP accounts

Correct AnswerverifiedShow Answer

How does one calculate personal income taxes

Correct AnswerverifiedShow Answer

Why is corporate tax popular among voters but economists believe consumers and workers bear most of the tax

Correct AnswerverifiedThe corporate income tax shows how dange...View AnswerShow Answer

Table 12-2 -Refer to Table 12-2.If the price of a weekend ski pass is $138 and this price reflects the actual unit cost of providing a weekend of skiing,how much consumer surplus accrues to Allyn and Greg,respectively

Correct AnswerverifiedShow Answer

What is the marginal tax rate for a lump-sum tax

Correct AnswerverifiedShow Answer

Which tax systems is most fair

Correct AnswerverifiedShow Answer

The most important taxes for the federal government are individual income taxes and corporate income taxes.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Federal government: CHST,Old Age Securit...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The corporate income tax shows how dange...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified