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Which sentence best describes a regressive tax? 
 
(i) Regressive taxes place a higher burden on people who earn less compared to wealthier taxpayers. 
(ii) Regressive taxes place a higher burden on wealthy taxpayers compared to people who earn less. 
(iii) Regressive taxes result in poor taxpayers paying no taxes. 
(iv) Regressive taxes prevent tax rates from rising over time. 
 

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Deanna Hettinger
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13 Feb 2020

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Related questions

1. If the government raised the limits on the amount of wage income that is subject to the F.I.C.A. tax, this would:

a. Move the Lorenz curve further from the line of income equality

b. Have no effect on the Lorenz curve

c. Raise the tax burden on all wage earners

d. none of the above

 

2. The California State sales tax is considered regressive because it:

a. Imposes a lower effective tax rate on higher-income taxpayers

b. Taxes poor people for basic necessities

c. Only taxes wage income

d. All of the above

 

3. Assume the marginal tax rate is 12% for the first $40,000 of taxable income, 28% for taxable income from $40,0001 and to $100,000 and 30% for taxable income above $100,000. If Mr. Smith had a taxable income of $120,000 how much tax does he owes?

a. $27,600 (I think this is the answer)
b. $33,600

c. $34,000

d. $36,000

 

4. In question 3, what is Mr. Smith's nominal tax rate?
a. 12%

b. 23%

c. 28% or

d. 30%

 

46. In a proportional income tax system,

marginal tax rates increase as the level of taxable income increases.

marginal tax rates are the same regardless of the level of taxable income.

everyone pays the same dollar amount in taxes.

marginal tax rates decline as the level of taxable income declines.

47 A tax system that applies a lower marginal tax rate at higher levels of income is

backward.

regressive.

progressive.

proportional.

48 The average tax rate can be calculated by which of the following formulas?

The change in taxes due divided by the change in taxable income

The change in taxable income divided by the change in taxes due

Total taxable income divided by total taxes due

Total taxes due divided by total taxable income

49 Under a progressive income tax system, the marginal income tax rate paid by taxpayers

declines as their incomes increase

. is unrelated to their incomes.

rises as their incomes increase.

is unchanged as their incomes increase.

50 The tax base is the minimum amount of tax revenue that government must collect each year.

the maximum amount of tax revenue that government must collect each year.

the sum of all incomes earned in the United States.

the value of all goods, services, incomes, or wealth subject to taxation.

51 A capital gain is defined as the tax paid when one sells an asset.

the tax rate one pays when one moves into a higher tax bracket.

an unanticipated increase in income.

the positive difference between the sale price and the purchase price of an asset.

52 Corporate profits are

taxed twiceonce by the corporate tax system, and again by personal tax system when they are paid to stockholders as dividends.

taxed only when a stockholder sells his or her shares of stock.

taxed at too low a rate.

taxed three timesonce by the corporate tax system, again by the personal tax system, and again as capital gains.

53 Social Security taxes are regressive because

they apply only to rich people.

they are not applied to income beyond a certain amount.

they are applied to welfare recipients.

they are applied to retired people only.

54 The largest share of federal government tax receipts is derived from

excise taxes.

individual income taxes.

corporate income taxes.

social insurance contributions.

55 Local government expenditures depend on which taxes?

Social Security taxes

Local property, sales, and excise taxes

Capital gains taxes

Revenues from licenses and permits

56 When the purchase price of an asset is less than its sale price, then there is a

budget deficit.

corporate income tax.

capital gain.

capital loss.

57 The earnings that a corporation saves for investment in other productive activities are

transfers in kind. c

apital gains.

tax incidence.

retained earnings.

58 Tax incidence refers to

determining who sends the taxes into the government.

the distribution of tax burdens among groups, or who really pays a tax.

the tendency of some people to avoid paying taxes at all.

determining the marginal tax rate applied to any increase in income.

59 Social Security taxes are paid by

neither employers nor employees

both employers and employees.

employers only.

employees only.

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Jeremiah takes out a CD and keeps the rest of his money in a savings account. Molly splits her investment between mutual funds and a money market account. QUESTION 10 Rudy is a 52-year-old freelance writer who wants a short-term, low-risk investment with low liquidity. Which of these investment vehicles should he consider? (5 points) CD IRA Mutual fund Stocks QUESTION 11 Hometown Bank Products Minimum Opening Deposit Interest Paid per Year Monthly Fee Checking $100.00 0.00% $0.00 Savings $250.00 0.50% $0.00 Platinum Savings $1,000.00 0.75% $10.00 CD (1year) $1,000.00 1.05% $0.00 CD (5 year) $1,000.00 1.80% $0.00 Money Market $1,000.00 0.75% $10.00 Vesna has $1,000 to invest, and she will need to have her money available in the next six months. Which product will yield her the highest interest in her time frame with no monthly fee? (5 points) One-year CD Checking Platinum savings Savings QUESTION 12 Which type of credit involves a set limit based on what a consumer pays up front? (5 points) Loans Installment credit Secured credit cards Unsecured credit cards QUESTION 13 Milo has received several credit card offers. Which of the following features is the riskiest? (5 points) High credit limit Fixed interest Low credit limit Variable interest QUESTION 14 02_08_g14.jpg Amun has four credit cards, each with a different interest rate. He charges $1,000 to each card in January and does not pay down any of the cards for four months. Based on the data in the chart, which two cards accrue the most amount of interest over time? (5 points) Credit 1 and Credit 3 Credit 1 and Credit 4 Credit 2 and Credit 3 Credit 2 and Credit 4 QUESTION 15 Samuel needs to decrease his expenses. To which category should he make cuts first? (5 points) Entertainment Housing Transportation Utilities QUESTION 16 Your friend's job pays $5.00 per hour and he works 20 hours per week. His tax rate is 20 percent. Assuming he works 50 weeks of the year, his yearly gross income is (5 points) $1,000 $4,000 $5,000 $10,000 QUESTION 17 02_08_g17_q3.jpg Gillian graphed her expenses in this pie chart to evaluate how she was spending her income. She would like to purchase health insurance, and calculates that it will cost 10 percent of her income for a year to save for the premium. How could she best shift her expenses to save 10 percent? (5 points) Buy a fuel-efficient car Cut household electricity usage Eat out less often Reduce payments on her debt QUESTION 18 Jonah has a high-paying job and would like to start saving for retirement. He has evaluated his budget in order to add savings to his expenses. He has a moderate amount of debt, and he spends a great deal on housing. His utilities, transportation, and health, expenses are fixed, and he spends little on recreation or eating out. Which action is he most likely to take? 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