UO ACTG 470 Midterm 1 Test
With Solution
Types of Taxes - ANSWER Transaction, property, privileges/rights, & income
Transaction taxes - ANSWER taxes on economic transactions such as the sale
of goods and services which consumption tax (sales, use, and excise), wealth
transfer tax (gift and estate), and employment tax (medicare and social
security)
Property Taxes - ANSWER Taxes on property, especially real estate, but also
can be on boats, automobiles (often paid along with license fees),
recreational vehicles, and business inventories.
Taxes on Privileges and Rights - ANSWER Include customs duty, franchise
tax, and occupational taxes
Income Tax Levels - ANSWER federal, state, and local
Federal Income Tax - ANSWER the taxes that the federal government
imposes on personal income in order to provide services
, State Income Taxes - ANSWER most states have this and it usually
"piggybacks off federal taxes
Local Income Tax - ANSWER applies to those who earn money in that state
not just reside there
4 Considerations of tax law - ANSWER Equity, economic, social, and political
considerations
Equity Considerations - ANSWER a tax law is fair if: it has horizontal equity,
vertical equity, and the wherewithal to pay
Horizontal Equity - ANSWER the idea that taxpayers with similar abilities to
pay taxes should pay the same amount
Vertical Equity - ANSWER the idea that taxpayers with a greater ability to pay
taxes should pay larger amounts
Wherewithal to pay - ANSWER tax should be recognized and paid when the
taxpayer has the resources to pay
Economic Considerations - ANSWER when the amount of revenue it raises is
With Solution
Types of Taxes - ANSWER Transaction, property, privileges/rights, & income
Transaction taxes - ANSWER taxes on economic transactions such as the sale
of goods and services which consumption tax (sales, use, and excise), wealth
transfer tax (gift and estate), and employment tax (medicare and social
security)
Property Taxes - ANSWER Taxes on property, especially real estate, but also
can be on boats, automobiles (often paid along with license fees),
recreational vehicles, and business inventories.
Taxes on Privileges and Rights - ANSWER Include customs duty, franchise
tax, and occupational taxes
Income Tax Levels - ANSWER federal, state, and local
Federal Income Tax - ANSWER the taxes that the federal government
imposes on personal income in order to provide services
, State Income Taxes - ANSWER most states have this and it usually
"piggybacks off federal taxes
Local Income Tax - ANSWER applies to those who earn money in that state
not just reside there
4 Considerations of tax law - ANSWER Equity, economic, social, and political
considerations
Equity Considerations - ANSWER a tax law is fair if: it has horizontal equity,
vertical equity, and the wherewithal to pay
Horizontal Equity - ANSWER the idea that taxpayers with similar abilities to
pay taxes should pay the same amount
Vertical Equity - ANSWER the idea that taxpayers with a greater ability to pay
taxes should pay larger amounts
Wherewithal to pay - ANSWER tax should be recognized and paid when the
taxpayer has the resources to pay
Economic Considerations - ANSWER when the amount of revenue it raises is
