TAX EXAM #1 QUIZ QUESTIONS AND
ANSWERS
Which fof fthe ffollowing fis fmost fconvenient ffor findividuals f(Purchasers) fto fpay?
- fSales ftax
- fUse ftax
-Federal fIncome ftax
- fReal fproperty ftax f- fans-Sales fTax
Which fof fthe ffollowing fdescribes fa ftax fthat fmeans fthe fstandard fof
fconvenience? f
- fA ftax fthat fthe fgovernment fcan fadminister fwithout fexcessive fcosts
-A ftax fthat fis feasy ffor ftax fpayers fto fcompute fand fpay f
-A ftax fthat fminimizes fthe fopportunity ffor fnoncompliance f
- fAll fof fthese fdescribe fa fconvenient ftax f- fans-All fof fthese fdescribe fa
fconvenient ftax
A fconvenient ftax fhas flow fcompliance fcosts ffor ftaxpayers fand flow fcollection
fand fenforcement fcosts ffor fthe fgovernment f
T/F f- fans-true
If fstate fH fincrease fits fsales ftax fby f1%, fits fsales ftax frevenue fmust falso
fincrease fby f1%
T/F f- fans-False
Government fofficials fof fCountry fZ festimate fthat fthe fnext fyear's fpublic
fprograms fwill fcost f$19 fmillion fbut fthat ftax frevenues fwill fonly fbe f415 fmillion.
fThe fofficials fcould favoid fa fdeficit fnext fyear fby fadopting fwhich fof fthe
ffollowing ffiscal fstrategies? f
- fReduce fthe fcost fof fpublic fprograms fby f$4 fmillion f
-Increase ftaxes fby f$4 fmillion f
-Borrow f$4 fmillion fby fissuing fnew fgovernment fbonds
-All fof fthese fstrategies fwould favoid fa fdeficit f- fans-- fall fof fthese fstrategies
fwill favoid fa fdeficit
, A fstatic fforcast fpf fthe frevenue feffect fof fa ftax frate fchange fassumes fthat fthe
ftax fbase fdoes fnot fchange. f
T/F f- fans-True
A fdynamic fforecast fof fthe frevenue feffect fof fa ftax frate fchange fassumes fthat
fthe ftax fbase fdoes fnot fchange f
T/F f- fans-False
Tax fliability fdivided fby ftaxable fincome fequals fmarginal ftax frate. f
T/F f- fans-False
If fa ftax fhas fa fproportionate frate fstructure, fa ftaxpayer's fmarginal frate fand
faverage frate fare fequal.
T/F f- fans-True
Vervet fCounty flevies fa freal fproperty ftax fbased fon fthe ffollowing fschedule.
Rate fAssessed fvalue
3% f$-0- fto f$250,000+
f1% f$250,001 fand fabove
Which fof fthe ffollowing fstatements fis ffalse?
- fIf fMr. fClem fowns freal fproperty fvalue fat f$122,500, fthe faverage ftax frate fis
f3%
- fIf fMs. fbaker fowns freal fproperty fvalued fat f$445,650, fthe faverage ftax frate
fis f2.1%
-If fMs. fLumley fowns freal fproperty fvalues fat f$750,000, fthe fmarginal ftax frate
fis f1% f
- fNone fof fthe fchoices fare ffalse. f- fans--none fof fthe fchoices fare ffalse
The fcity fof fSpringvale fimposes fa fnet fincome ftax fon fbusinesses foperating
fwithin fits fjurisdiction. fThe ftax fequals f1% fof fincome fup fto f$100,000 fand
f1.5% fof fincome fin fexcess fof f$100,000. fThe fSpringvale fBar fand fGrill
fgenerated f$782,000 fnet fincome fthis fyear. fCompute fits fcity fincome ftax.
-$10,230
-$11,230
-$11,730
-None fof fthese fchoices fare fcorrect f- fans--$11,230
A fdeduction fis fworth ftwice fas fmuch fto fa ftaxpayer fwith fa f30% fmarginal frate
fthan fto fa ftaxpayer fwith fa f15% frate.
ANSWERS
Which fof fthe ffollowing fis fmost fconvenient ffor findividuals f(Purchasers) fto fpay?
- fSales ftax
- fUse ftax
-Federal fIncome ftax
- fReal fproperty ftax f- fans-Sales fTax
Which fof fthe ffollowing fdescribes fa ftax fthat fmeans fthe fstandard fof
fconvenience? f
- fA ftax fthat fthe fgovernment fcan fadminister fwithout fexcessive fcosts
-A ftax fthat fis feasy ffor ftax fpayers fto fcompute fand fpay f
-A ftax fthat fminimizes fthe fopportunity ffor fnoncompliance f
- fAll fof fthese fdescribe fa fconvenient ftax f- fans-All fof fthese fdescribe fa
fconvenient ftax
A fconvenient ftax fhas flow fcompliance fcosts ffor ftaxpayers fand flow fcollection
fand fenforcement fcosts ffor fthe fgovernment f
T/F f- fans-true
If fstate fH fincrease fits fsales ftax fby f1%, fits fsales ftax frevenue fmust falso
fincrease fby f1%
T/F f- fans-False
Government fofficials fof fCountry fZ festimate fthat fthe fnext fyear's fpublic
fprograms fwill fcost f$19 fmillion fbut fthat ftax frevenues fwill fonly fbe f415 fmillion.
fThe fofficials fcould favoid fa fdeficit fnext fyear fby fadopting fwhich fof fthe
ffollowing ffiscal fstrategies? f
- fReduce fthe fcost fof fpublic fprograms fby f$4 fmillion f
-Increase ftaxes fby f$4 fmillion f
-Borrow f$4 fmillion fby fissuing fnew fgovernment fbonds
-All fof fthese fstrategies fwould favoid fa fdeficit f- fans-- fall fof fthese fstrategies
fwill favoid fa fdeficit
, A fstatic fforcast fpf fthe frevenue feffect fof fa ftax frate fchange fassumes fthat fthe
ftax fbase fdoes fnot fchange. f
T/F f- fans-True
A fdynamic fforecast fof fthe frevenue feffect fof fa ftax frate fchange fassumes fthat
fthe ftax fbase fdoes fnot fchange f
T/F f- fans-False
Tax fliability fdivided fby ftaxable fincome fequals fmarginal ftax frate. f
T/F f- fans-False
If fa ftax fhas fa fproportionate frate fstructure, fa ftaxpayer's fmarginal frate fand
faverage frate fare fequal.
T/F f- fans-True
Vervet fCounty flevies fa freal fproperty ftax fbased fon fthe ffollowing fschedule.
Rate fAssessed fvalue
3% f$-0- fto f$250,000+
f1% f$250,001 fand fabove
Which fof fthe ffollowing fstatements fis ffalse?
- fIf fMr. fClem fowns freal fproperty fvalue fat f$122,500, fthe faverage ftax frate fis
f3%
- fIf fMs. fbaker fowns freal fproperty fvalued fat f$445,650, fthe faverage ftax frate
fis f2.1%
-If fMs. fLumley fowns freal fproperty fvalues fat f$750,000, fthe fmarginal ftax frate
fis f1% f
- fNone fof fthe fchoices fare ffalse. f- fans--none fof fthe fchoices fare ffalse
The fcity fof fSpringvale fimposes fa fnet fincome ftax fon fbusinesses foperating
fwithin fits fjurisdiction. fThe ftax fequals f1% fof fincome fup fto f$100,000 fand
f1.5% fof fincome fin fexcess fof f$100,000. fThe fSpringvale fBar fand fGrill
fgenerated f$782,000 fnet fincome fthis fyear. fCompute fits fcity fincome ftax.
-$10,230
-$11,230
-$11,730
-None fof fthese fchoices fare fcorrect f- fans--$11,230
A fdeduction fis fworth ftwice fas fmuch fto fa ftaxpayer fwith fa f30% fmarginal frate
fthan fto fa ftaxpayer fwith fa f15% frate.
