E.31: Types of Taxes

Front

What does a progressive tax system entail?

Back

A higher income results in a higher percentage of income paid in taxes.

Front

What principle is the rationale behind progressive taxation based on?

Back

Ability-to-pay principle

Front

Which of the following is an example of a progressive tax? Federal income tax in the United States, Sales tax, State income tax in some states, Payroll tax

Back

Federal income tax in the United States

Front

What characterizes a proportional tax system?

Back

Everyone pays the same percentage of their income in taxes.

Front

Which of the following is a criticism of proportional taxation?
Options:
It benefits high-income earners disproportionately.
It is too complicated to implement.
It does not generate enough revenue.
It disproportionately affects low-income earners.

Back

It disproportionately affects low-income earners.

Front

What is a regressive tax?

Back

A tax where the rate decreases as the income increases.

Front

Which of the following is an example of a regressive tax? Estate tax, Sales tax, Income tax, Corporate tax

Back

Sales tax

Front

What does the federal government use tax revenue for?

Back

National defense and social security

Front

Which tax is primarily relied upon by local governments?

Back

Property taxes

Front

What is the main use of revenue collected from state taxes?

Back

Financing state-specific expenditures