Solution Manual for Principles of Taxation for Business and Investment
Planning 2025 Evergreen Release By Sally Jones, Shelley Rhoades-Catanach
All Chapters ||Complete A+ Guide Latest Version
A+ Page 1
,Principles of Taxation for Business and Investment Planning 2025 Editionby Sally Jones, Shelley
Rhoades Catanach
Chapter 1 Taxes and Taxing Jurisdictions
Questions and Problems for Discussion
1. Tax payments differ from government fines and penalties because they aren‘t
intended to deter or punish unacceptable behavior. Tax payments differ from fees
or user charges because they don‘t entitle the payer to a specific government good or
service, such as a postage stamp or a driver‘s license. Tax payments also differ from
fees or user charges because they are compulsory.
2. This payment has characteristics of a tax, a penalty, and a user fee. The compulsory
payment is not specifically punitive but does apply selectively to those companies
most likely responsible for the polluted condition of Green River. However, these
same companies may be the entities that benefit most from the environmental clean-
up.
3. This payment more closely resembles a fee for a government service than a
transaction-based tax because the transaction occurs between a private party and
the jurisdiction itself, rather than between private parties engaging in a market
transaction. The payment also entitles the payer to a specific benefit (the right to
marry under law).
A+ Page 2
, 4. To the extent that the decline in exterior maintenance reduces the value of Mr.
Powell‘s apartment complex, he bears the incidence of the increased property tax. To
the extent that the decline reduces the value of adjoining properties or makes the
neighborhood less attractive, the owners of the adjoining properties and the
neighborhood residents share the incidence of the tax increase.
5. People who don‘t directly use public schools (such as Mr. and Mrs. Ahern or people
who don‘t have children) indirectly benefit from a public education system for the
general population. Arguably, public education contributes to a skilled workforce
and improves the cultural and social environment in which Mr. and Mrs. Ahern live.
Based on this argument, Mr. and Mrs. Ahern should not be exempt from the local
property tax.
6. The consumers who pay the same price for a smaller bar of soap of lesser
quality bear the incidence of the new gross receipts tax.
7. Real property can‘t be hidden or moved, and its ownership (legal title) is a
matter of public record. In contrast, personal property is mobile and may be
easily concealed. Moreover, jurisdictions may not have an effective means to
discover or trace ownership of personal property.
8. Arguably, private golf courses beautify the locality and are environmentally more
desirable than other commercial activities. They also may require more acreage than
other businesses and, therefore, would be at a competitive disadvantage without a
A+ Page 3
, preferential real property tax rate.
9. Many jurisdictions that levy property taxes provide an exemption for public
institutions, such as state universities or private colleges. If University K is
entitled to such an exemption, every commercial building or residence acquired by
the University reduces the local jurisdiction‘s property tax base.
A+ Page 4
Planning 2025 Evergreen Release By Sally Jones, Shelley Rhoades-Catanach
All Chapters ||Complete A+ Guide Latest Version
A+ Page 1
,Principles of Taxation for Business and Investment Planning 2025 Editionby Sally Jones, Shelley
Rhoades Catanach
Chapter 1 Taxes and Taxing Jurisdictions
Questions and Problems for Discussion
1. Tax payments differ from government fines and penalties because they aren‘t
intended to deter or punish unacceptable behavior. Tax payments differ from fees
or user charges because they don‘t entitle the payer to a specific government good or
service, such as a postage stamp or a driver‘s license. Tax payments also differ from
fees or user charges because they are compulsory.
2. This payment has characteristics of a tax, a penalty, and a user fee. The compulsory
payment is not specifically punitive but does apply selectively to those companies
most likely responsible for the polluted condition of Green River. However, these
same companies may be the entities that benefit most from the environmental clean-
up.
3. This payment more closely resembles a fee for a government service than a
transaction-based tax because the transaction occurs between a private party and
the jurisdiction itself, rather than between private parties engaging in a market
transaction. The payment also entitles the payer to a specific benefit (the right to
marry under law).
A+ Page 2
, 4. To the extent that the decline in exterior maintenance reduces the value of Mr.
Powell‘s apartment complex, he bears the incidence of the increased property tax. To
the extent that the decline reduces the value of adjoining properties or makes the
neighborhood less attractive, the owners of the adjoining properties and the
neighborhood residents share the incidence of the tax increase.
5. People who don‘t directly use public schools (such as Mr. and Mrs. Ahern or people
who don‘t have children) indirectly benefit from a public education system for the
general population. Arguably, public education contributes to a skilled workforce
and improves the cultural and social environment in which Mr. and Mrs. Ahern live.
Based on this argument, Mr. and Mrs. Ahern should not be exempt from the local
property tax.
6. The consumers who pay the same price for a smaller bar of soap of lesser
quality bear the incidence of the new gross receipts tax.
7. Real property can‘t be hidden or moved, and its ownership (legal title) is a
matter of public record. In contrast, personal property is mobile and may be
easily concealed. Moreover, jurisdictions may not have an effective means to
discover or trace ownership of personal property.
8. Arguably, private golf courses beautify the locality and are environmentally more
desirable than other commercial activities. They also may require more acreage than
other businesses and, therefore, would be at a competitive disadvantage without a
A+ Page 3
, preferential real property tax rate.
9. Many jurisdictions that levy property taxes provide an exemption for public
institutions, such as state universities or private colleges. If University K is
entitled to such an exemption, every commercial building or residence acquired by
the University reduces the local jurisdiction‘s property tax base.
A+ Page 4
