Taxation CH's 1,2,3,5

Margaret was issued a $150 speeding ticket. This is:

• a tax because payment is required by law.

• a tax because the payment is not related to any specific benefit received from the government agency collecting the ticket.

• • not a tax because it is considered a fine intended to punish illegal behavior.

• a tax because it is imposed by a government agency.

Which of the following is considered a tax?

• Tolls

• Parking meter fees

• a local surcharge paid on retail sales to fund public schools

• Entrance fees paid at national parks

The state of Georgia recently increased its tax on a carton of cigarettes by $2.00. What type of tax is this?

• A sin tax

• An excise tac

• It is not a tax; it is a fine

• A sin tax and an excise tax are correct

Which of the following is false?

• • 
    

    A proportional tax rate structure imposes a constant tax rate while a progressive tax rate structure imposes an increasing marginal rate related to the tax base.

• The average tax rate changes under a proportional tax rate structure, but it is static for a progressive tax rate system.

• • An example of a proportional tax is the tax on gasoline.

• An example of a progressive tax is the federal tax on gifts

Which of the following statements is true?

• Municipal bond interest is subject to explicit federal tax.

• Municipal bond interest is subject to implicit tax.

• Municipal bonds typically pay a higher interest rate than corporate bonds with similar risk.

• All of these statements are true.

Congress recently approved a new, smaller budget for the IRS. What taxation concept evaluates the cost of administering our tax law?

• Convenience

• Economy

• Certainty

• Equity

Eliminating the current system of withholding income taxes directly from employee paychecks would:

• violate the convenience criterion of federal taxation.

• increase the rate of compliance.

• make collection of federal income taxes easier.

• • None of the choices are correct.

The tax return filing requirements for individual taxpayers only depend on the taxpayer's filing status.

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• True

• False

Revenue rulings and revenue procedures are examples of primary authorities.

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• True

• False

The Internal Revenue Code of 1986 is the name of the current income tax code of the United States of America.

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• True

• False