DOWNLOAD THE Test Bank for Principles of Taxation for Business and Invest
c c c c c c c c c c c
ment Planning 20th Edition Jones
c c c c
Chapterc02c-cPolicycStandardscforcacGoodcTax
Chapter 02 Po c c
licy Standards for a Good Tax
c c c c c
Truec/cFalsecQuestions
1. Actaxcmeetscthecstandardcofcsufficiencycifcitcisceasycforcpeoplectocpaycthectax.cTr
ue False
2. Thecfederalcgovernmentciscnotcrequiredctocpaycinterestconcthecnationalcdebt.cT
rue False
3. Acstaticcforecastcofcthecrevenueceffectcofcactaxcratecchangecassumescthatcthectaxcbasecdoescnotcch
ange.
True False
4. Acdynamiccforecastcofcthecrevenueceffectcofcactaxcratecchangecassumescthatcthectaxcbasecdoescno
tcchange.
True False
5. ThecfederalcSocialcSecurityctaxcburdenconcemployeeschascnotcincreasedcsincec1990cbecausecth
ectaxcratechascnotcincreasedcsincecthatcyear.
True False
6. IfcStatecHcincreasescitscsalesctaxcratecbyc1%,citscsalesctaxcrevenuecmustcalsocincreasecbyc1%.cTr
ue False
2-1
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HillcEducation.
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,DOWNLOAD THE Test Bank for Principles of Taxation for Business and Invest
c c c c c c c c c c c
ment Planning 20th Edition Jones
c c c c
Chapterc02c-cPolicycStandardscforcacGoodcTax
7. TheccitycofcBernecrecentlycenactedcac10%ctaxconcthecpricecofcacsubwaycticket.cConsequently,cM
rs.cLanecnowcwalksctocworkcinsteadcofctakingcthecsubway.cHercbehaviorcillustratescthecsubstitutio
nceffectcofcactaxcincrease.
True False
8. JurisdictioncPcrecentlycincreasedcitscincomectaxcrate.cActaxpayercwhocreactsctocthecincreasecbycw
orkingcharderctocearncmorecincomeciscdemonstratingcthecincomeceffectcofcthecratecincrease.cTrue
False
9. Accordingctocsupply-sidececonomicctheory,cacdecreasecinctaxcratescforchigh-
incomecindividualsccouldcactuallyccausecancincreasecinctaxcrevenue.
True False
10. Supply-
sidececonomicctheorycholdscthatcpeoplecwhocbenefitcfromcactaxcratecreductioncwillcspendctheircta
xcwindfallconcconsumptioncgoods.
True False
11. Statecusectaxescarecmorecconvenientcforcindividualcconsumerscthancstatecsalesctaxes.cT
rue False
12. ThecInternalcRevenuecService'sccostcofccollectingc$100cofctaxcrevenueciscaboutc$3.cT
rue False
13. Acconvenientctaxchasclowccomplianceccostscforctaxpayerscandclowccollectioncandce
nforcementccostscforcthecgovernment.
True False
2-2
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HillcEducation.
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,DOWNLOAD THE Test Bank for Principles of Taxation for Business and Invest
c c c c c c c c c c c
ment Planning 20th Edition Jones
c c c c
Chapterc02c-cPolicycStandardscforcacGoodcTax
14. Accordingctocthecclassicalcconceptcofcefficiency,cancefficientctaxcshouldcbecneutralcincitscef
fectconcfreecmarketcallocationscofceconomiccresources.
True False
15. AccordingctocthecKeynesiancconceptcofcefficiency,cancefficientctaxcshouldcbecneutralcincitscef
fectconcfreecmarketcallocationscofceconomiccresources.
True False
16. Actaxcmeetscthecstandardcofcefficiencycifcitcgeneratescenoughcrevenuectocpaycforcthecpubliccgo
odscandcservicescprovidedcbycthecgovernment.
True False
17. Acprovisioncincthectaxclawcdesignedctocencouragecacspecificceconomiccbehaviorciscactaxcpr
eference.
True False
18. Acgoodctaxcshouldcresultcinceitherchorizontalcorcverticalcequitycacrossctaxpayers.cT
rue False
19. Changescincthectaxclawcintendedctocmakecthecmeasurementcofctaxablecincomecmorecprecisecus
uallycmakecthectaxclawclessccomplex.
True False
20. Verticalcequitycfocusesconcmeasurementcofcthectaxcbase,candchorizontalcequitycfocusesconcth
ectaxcratecstructure.
True False
2-3
Copyrightc©c2017cMcGraw-HillcEducation.c Allcrightscreserved.cNocreproductioncorcdistributioncwithoutcthecpriorcwrittencconsentcofcMcGraw-
HillcEducation.
mynursytest.store
, DOWNLOAD THE Test Bank for Principles of Taxation for Business and Invest
c c c c c c c c c c c
ment Planning 20th Edition Jones
c c c c
Chapterc02c-cPolicycStandardscforcacGoodcTax
21. Taxcsystemscwithcregressivecratecstructurescresultcincacproportionallycheavierctaxcburdenconcp
ersonscwithcsmallerctaxcbases.
True False
22. Acprogressivecratecstructurecandcacproportionatecratecstructurecbothcresultcincverticalcequityca
crossctaxpayers.
True False
23. ThecU.S.cindividualcincomectaxchascalwayscusedcacprogressivecratecstructure.cT
rue False
24. Thecdecliningcmarginalcutilitycofcincomecacrosscindividualsccancbecmeasuredcempirically.cT
rue False
25. Taxcliabilitycdividedcbyctaxablecincomecequalscmarginalctaxcrate.c
True False
26. Ifcactaxchascacproportionatecratecstructure,cactaxpayer'scmarginalcratecandcaveragecratecareceq
ual.
True False
27. Ifcactaxchascacprogressivecratecstructure,cactaxpayer'scaveragecrateciscgreatercthanchercmarginalcrat
e.
True False
28. Thectheorycofcdistributionalcjusticeciscacrationalecforcacprogressivecincomectaxcsystem.cT
rue False
2-4
Copyrightc©c2017cMcGraw-HillcEducation.c Allcrightscreserved.cNocreproductioncorcdistributioncwithoutcthecpriorcwrittencconsentcofcMcGraw-
HillcEducation.
mynursytest.store
c c c c c c c c c c c
ment Planning 20th Edition Jones
c c c c
Chapterc02c-cPolicycStandardscforcacGoodcTax
Chapter 02 Po c c
licy Standards for a Good Tax
c c c c c
Truec/cFalsecQuestions
1. Actaxcmeetscthecstandardcofcsufficiencycifcitcisceasycforcpeoplectocpaycthectax.cTr
ue False
2. Thecfederalcgovernmentciscnotcrequiredctocpaycinterestconcthecnationalcdebt.cT
rue False
3. Acstaticcforecastcofcthecrevenueceffectcofcactaxcratecchangecassumescthatcthectaxcbasecdoescnotcch
ange.
True False
4. Acdynamiccforecastcofcthecrevenueceffectcofcactaxcratecchangecassumescthatcthectaxcbasecdoescno
tcchange.
True False
5. ThecfederalcSocialcSecurityctaxcburdenconcemployeeschascnotcincreasedcsincec1990cbecausecth
ectaxcratechascnotcincreasedcsincecthatcyear.
True False
6. IfcStatecHcincreasescitscsalesctaxcratecbyc1%,citscsalesctaxcrevenuecmustcalsocincreasecbyc1%.cTr
ue False
2-1
Copyrightc©c2017cMcGraw-HillcEducation.c Allcrightscreserved.cNocreproductioncorcdistributioncwithoutcthecpriorcwrittencconsentcofcMcGraw-
HillcEducation.
mynursytest.store
,DOWNLOAD THE Test Bank for Principles of Taxation for Business and Invest
c c c c c c c c c c c
ment Planning 20th Edition Jones
c c c c
Chapterc02c-cPolicycStandardscforcacGoodcTax
7. TheccitycofcBernecrecentlycenactedcac10%ctaxconcthecpricecofcacsubwaycticket.cConsequently,cM
rs.cLanecnowcwalksctocworkcinsteadcofctakingcthecsubway.cHercbehaviorcillustratescthecsubstitutio
nceffectcofcactaxcincrease.
True False
8. JurisdictioncPcrecentlycincreasedcitscincomectaxcrate.cActaxpayercwhocreactsctocthecincreasecbycw
orkingcharderctocearncmorecincomeciscdemonstratingcthecincomeceffectcofcthecratecincrease.cTrue
False
9. Accordingctocsupply-sidececonomicctheory,cacdecreasecinctaxcratescforchigh-
incomecindividualsccouldcactuallyccausecancincreasecinctaxcrevenue.
True False
10. Supply-
sidececonomicctheorycholdscthatcpeoplecwhocbenefitcfromcactaxcratecreductioncwillcspendctheircta
xcwindfallconcconsumptioncgoods.
True False
11. Statecusectaxescarecmorecconvenientcforcindividualcconsumerscthancstatecsalesctaxes.cT
rue False
12. ThecInternalcRevenuecService'sccostcofccollectingc$100cofctaxcrevenueciscaboutc$3.cT
rue False
13. Acconvenientctaxchasclowccomplianceccostscforctaxpayerscandclowccollectioncandce
nforcementccostscforcthecgovernment.
True False
2-2
Copyrightc©c2017cMcGraw-HillcEducation.c Allcrightscreserved.cNocreproductioncorcdistributioncwithoutcthecpriorcwrittencconsentcofcMcGraw-
HillcEducation.
mynursytest.store
,DOWNLOAD THE Test Bank for Principles of Taxation for Business and Invest
c c c c c c c c c c c
ment Planning 20th Edition Jones
c c c c
Chapterc02c-cPolicycStandardscforcacGoodcTax
14. Accordingctocthecclassicalcconceptcofcefficiency,cancefficientctaxcshouldcbecneutralcincitscef
fectconcfreecmarketcallocationscofceconomiccresources.
True False
15. AccordingctocthecKeynesiancconceptcofcefficiency,cancefficientctaxcshouldcbecneutralcincitscef
fectconcfreecmarketcallocationscofceconomiccresources.
True False
16. Actaxcmeetscthecstandardcofcefficiencycifcitcgeneratescenoughcrevenuectocpaycforcthecpubliccgo
odscandcservicescprovidedcbycthecgovernment.
True False
17. Acprovisioncincthectaxclawcdesignedctocencouragecacspecificceconomiccbehaviorciscactaxcpr
eference.
True False
18. Acgoodctaxcshouldcresultcinceitherchorizontalcorcverticalcequitycacrossctaxpayers.cT
rue False
19. Changescincthectaxclawcintendedctocmakecthecmeasurementcofctaxablecincomecmorecprecisecus
uallycmakecthectaxclawclessccomplex.
True False
20. Verticalcequitycfocusesconcmeasurementcofcthectaxcbase,candchorizontalcequitycfocusesconcth
ectaxcratecstructure.
True False
2-3
Copyrightc©c2017cMcGraw-HillcEducation.c Allcrightscreserved.cNocreproductioncorcdistributioncwithoutcthecpriorcwrittencconsentcofcMcGraw-
HillcEducation.
mynursytest.store
, DOWNLOAD THE Test Bank for Principles of Taxation for Business and Invest
c c c c c c c c c c c
ment Planning 20th Edition Jones
c c c c
Chapterc02c-cPolicycStandardscforcacGoodcTax
21. Taxcsystemscwithcregressivecratecstructurescresultcincacproportionallycheavierctaxcburdenconcp
ersonscwithcsmallerctaxcbases.
True False
22. Acprogressivecratecstructurecandcacproportionatecratecstructurecbothcresultcincverticalcequityca
crossctaxpayers.
True False
23. ThecU.S.cindividualcincomectaxchascalwayscusedcacprogressivecratecstructure.cT
rue False
24. Thecdecliningcmarginalcutilitycofcincomecacrosscindividualsccancbecmeasuredcempirically.cT
rue False
25. Taxcliabilitycdividedcbyctaxablecincomecequalscmarginalctaxcrate.c
True False
26. Ifcactaxchascacproportionatecratecstructure,cactaxpayer'scmarginalcratecandcaveragecratecareceq
ual.
True False
27. Ifcactaxchascacprogressivecratecstructure,cactaxpayer'scaveragecrateciscgreatercthanchercmarginalcrat
e.
True False
28. Thectheorycofcdistributionalcjusticeciscacrationalecforcacprogressivecincomectaxcsystem.cT
rue False
2-4
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HillcEducation.
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