ACCT 3843 Test 1 - UARK Thomas With
Complete Solutions!!
What percentage of the government revenue comes from things other than taxes? -
ANSWER>>Less than 6%
Tax - ANSWER>>a payment required by a government that is unrelated to any specific
benefit or service received from the government
3 Key Components of a Tax - ANSWER>>- Payment is Required
- Payment is imposed by a government agency (federal, state, or local)
- Payment is not tied directly to benefit received by the taxpayer
How to Calculate a Tax - ANSWER>>= Tax Base x Tax Rate
Tax Rate - ANSWER>>level of taxes imposed on the tax base and is usually expressed
as a percentage
Tax Base - ANSWER>>defines what is actually taxed and is usually expressed in
monetary terms
Proportional Tax Rate (Flat Tax) - ANSWER>>imposes a constant tax rate throughout
the tax base
Progressive Tax Rate - ANSWER>>imposes an increasing marginal tax rate as the tax
base increases (as the tax base increases, the marginal tax rate and taxes paid
increase)
,Regressive Tax Rate - ANSWER>>imposes a decreasing marginal tax rate as the tax
base increases (as the tax base increases, the taxes paid increase, but the marginal tax
rate decreases)
Average Tax Rate - ANSWER>>the taxpayers average level of taxation on each dollar
of taxable income (total tax/taxable income)
Effective Tax Rate - ANSWER>>the taxpayer's average rate of taxation on each dollar
of total income (both taxable and non-taxable) (total tax/total income)
Marginal Tax Rate - ANSWER>>tax rate that applies to the next additional increment of
a taxpayer's taxable income (change in tax/change in taxable income)
Types of Federal Taxes - ANSWER>>- Income taxes
- Employment and unemployment taxes
- Excise taxes
- Transfer taxes
Types of State and Local Taxes - ANSWER>>- Sales and use taxes
- Property taxes
- Income taxes
- Excise taxes
Income Taxes - ANSWER>>levied on individuals, corporations, estates, and trusts
Employment and Unemployment Taxes - ANSWER>>social security tax and the
medicare tax - paid by employee and employer
Unemployment Taxes - ANSWER>>paid by employer only
, Excise Taxes - ANSWER>>levied on the quantity of products sold
Estate & Gift Taxes - ANSWER>>tax on fair market value of wealth transferred upon
death or by gift
Use Taxes - ANSWER>>the tax base is the retail price of goods owned, possessed, or
consumed within a state that were not purchased in that state
Ad Valorem Taxes - ANSWER>>the tax based for each is the fair market value of the
property
Example of Ad Valorem Taxes - ANSWER>>Property Taxes
Real Property Taxes - ANSWER>>taxes on land and structures permanently attached
to land
Personal Property Taxes - ANSWER>>include taxes on all other types of property, both
tangible and intangible
Implicit Taxes - ANSWER>>direct taxes that result from a tax advantage the
government grants to certain transactions
5 Ways to Evaluate Different Tax Systems - ANSWER>>- Sufficiency: enough $$$ ?
- Equity: distributing the tax burden
- Certainty: when, where, and how will the tax be collected
- Convenience: without undue hardship to the taxpayer.
- Economy: compliance and administration costs
Complete Solutions!!
What percentage of the government revenue comes from things other than taxes? -
ANSWER>>Less than 6%
Tax - ANSWER>>a payment required by a government that is unrelated to any specific
benefit or service received from the government
3 Key Components of a Tax - ANSWER>>- Payment is Required
- Payment is imposed by a government agency (federal, state, or local)
- Payment is not tied directly to benefit received by the taxpayer
How to Calculate a Tax - ANSWER>>= Tax Base x Tax Rate
Tax Rate - ANSWER>>level of taxes imposed on the tax base and is usually expressed
as a percentage
Tax Base - ANSWER>>defines what is actually taxed and is usually expressed in
monetary terms
Proportional Tax Rate (Flat Tax) - ANSWER>>imposes a constant tax rate throughout
the tax base
Progressive Tax Rate - ANSWER>>imposes an increasing marginal tax rate as the tax
base increases (as the tax base increases, the marginal tax rate and taxes paid
increase)
,Regressive Tax Rate - ANSWER>>imposes a decreasing marginal tax rate as the tax
base increases (as the tax base increases, the taxes paid increase, but the marginal tax
rate decreases)
Average Tax Rate - ANSWER>>the taxpayers average level of taxation on each dollar
of taxable income (total tax/taxable income)
Effective Tax Rate - ANSWER>>the taxpayer's average rate of taxation on each dollar
of total income (both taxable and non-taxable) (total tax/total income)
Marginal Tax Rate - ANSWER>>tax rate that applies to the next additional increment of
a taxpayer's taxable income (change in tax/change in taxable income)
Types of Federal Taxes - ANSWER>>- Income taxes
- Employment and unemployment taxes
- Excise taxes
- Transfer taxes
Types of State and Local Taxes - ANSWER>>- Sales and use taxes
- Property taxes
- Income taxes
- Excise taxes
Income Taxes - ANSWER>>levied on individuals, corporations, estates, and trusts
Employment and Unemployment Taxes - ANSWER>>social security tax and the
medicare tax - paid by employee and employer
Unemployment Taxes - ANSWER>>paid by employer only
, Excise Taxes - ANSWER>>levied on the quantity of products sold
Estate & Gift Taxes - ANSWER>>tax on fair market value of wealth transferred upon
death or by gift
Use Taxes - ANSWER>>the tax base is the retail price of goods owned, possessed, or
consumed within a state that were not purchased in that state
Ad Valorem Taxes - ANSWER>>the tax based for each is the fair market value of the
property
Example of Ad Valorem Taxes - ANSWER>>Property Taxes
Real Property Taxes - ANSWER>>taxes on land and structures permanently attached
to land
Personal Property Taxes - ANSWER>>include taxes on all other types of property, both
tangible and intangible
Implicit Taxes - ANSWER>>direct taxes that result from a tax advantage the
government grants to certain transactions
5 Ways to Evaluate Different Tax Systems - ANSWER>>- Sufficiency: enough $$$ ?
- Equity: distributing the tax burden
- Certainty: when, where, and how will the tax be collected
- Convenience: without undue hardship to the taxpayer.
- Economy: compliance and administration costs
