SOLUTIONS MANUAL FOR FUNDAMENTALS OF TAXATION 16TH EDITION BY CRUZ TEST BANK ALL CHAPTERS INCLUDED || LATEST AND COMPLETE UPDATE 2025 WITH VERIFIED SOLUTIONS|| GUARANTEED A+

SOLUTIONS MANUAL FOR FUNDAMENTALS OF
TAXATION 16TH EDITION BY CRUZ TEST BANK ALL
CHAPTERS INCLUDED || LATEST AND COMPLETE
UPDATE 2025 WITH VERIFIED SOLUTIONS||
GUARANTEED A+

,SOLUTIONS MANUAL FOR FUNDAMENTALS OF TAXATION 16TH EDITION BY
CRUZ TEST BANK ALL CHAPTERS INCLUDED || LATEST AND COMPLETE UPDATE
2025 WITH VERIFIED SOLUTIONS|| GUARANTEED A+
CHAPTER 01: SOLUTIONS END OF CHAPTER MATERIAL
Discussion Questions
1. (Introduction) Give a brief history of the income tax in the United States.


ANSWER:
The first federal income tax was enacted in 1861 to help finance the Civil War and was discarded soon thereafter. In
1894, another income tax was promulgated by Congress to raise additional tax revenue and to expand the sources of
revenue. In 1895, the Supreme Court ruled that the federal income tax was unconstitutional. In 1913, the sixteenth
Amendment to the U.S. Constitution was enacted. This amendment gave Congress the power to levy and collect
taxes. In 2020, the federal government collected about $1.75 trillion in individual income taxes.
Feedback:
Learning Objective: Introduction Topic: Income tax history Difficulty: 1 Easy
EA: No




2. (Introduction) For tax year 2020, what proportion of individual income tax returns was electronically filed? Use
Table 1-1.


ANSWER:
In 2020, electronically filed tax returns were about 94.25% of total returns.
Feedback: Calculated from Table 1-1 Learning Objective: Introduction Topic: Income tax data
Difficulty: 2 Medium EA: No




3. Name the three types of tax rate structures and give an example of each.
ANSWER:
Progressive – U.S. federal income tax
Proportional – “flat-tax” usually levied on property or sales at the state or local level
Regressive – Social security tax Feedback:
Learning Objective: 01-01

,Topic: Tax rate structure Difficulty: 1 Easy
EA: No




4. What is a progressive tax? Why do you think the government believes it is a more equitable tax than, say, a
regressive tax or proportional tax?


ANSWER:
A progressive rate structure is a structure where the tax rate increases as the tax base increases. The progressive
rate structure is viewed as more equitable because the amount of tax paid varies with the ability to pay. For
example, the government believes that as an individual makes more income, a smaller percentage of that income is
needed to buy necessary living supplies and thus more income is available to pay taxes.
Feedback:
Learning Objective: 01-01 Topic: Tax rate structure Difficulty: 2 Medium
EA: No




5. What type of tax is a sales tax? Explain your answer.


ANSWER:
The sales tax is a proportional tax. A proportional tax is a tax where the tax rate remains the same regardless of the
tax base. Most county or state sales tax rates are the same regardless of the amount of sales upon which the tax is
levied. With a proportional tax, the marginal tax rate and average tax rate are always the same.
Feedback:
Learning Objective: 01-01 Topic: Tax rate structure Difficulty: 1 Easy
EA: No




6. What is the definition of tax base, and how does it affect the amount of tax levied?


ANSWER:
The tax base is the dollar amount upon which the tax rate is applied in order to determine the actual tax. Income,
dollar sales, and property value are the more common tax bases in the United States.

, Feedback:
Learning Objective: 01-01 Topic: Tax base