C237 Tax Topic 1 Questions| Questions With 100% Correct Answers | Verified

The two components of the tax calculation are the tax rate and the taxpayer's status. T/F - False, tax rate x tax base The 9th Amendment to the U.S. Constitution removed all doubt that a federal income tax was allowed under the U.S. Constitution. T/F - False, The 16th amendment was ratified in February 1913. The tax base for the federal income tax is taxable income. T/F - True Horizontal equity is defined in terms of taxpayers in similar situations whereas vertical equity is defined in terms of taxpayers in different situations. T/F - True In considering the "economy" criterion in evaluating tax systems, one must consider this criterion from both the taxpayer and the government's perspective. T/F - True A taxpayer's average tax rate is the most appropriate tax rate to use in tax planning. T/F - False, marginal tax rate The effective tax rate, in general, provides a better depiction of a taxpayer's tax burden than the average tax rate. T/F - True In a proportional (flat) tax rate system, the marginal tax rate will always equal the average tax rate. T/F - True In a regressive tax rate system, the marginal tax rate will often be greater than the average tax rate. T/F - False A common example of an employment related tax is the Medicare tax. T/F - True