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Exam 1: An Introduction to Tax

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Question 61

Multiple Choice

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The city of Granby,Colorado,recently enacted a 1.5 percent surcharge on vacation cabin rentals that will fund the city's new elementary school.This surcharge is an example of ________.

A) a sin tax to discourage undesirable behavior
B) a government fine
C) an earmarked tax
D) a sin tax to discourage undesirable behavior and an earmarked tax
E) None of the choices are correct

F) A) and B)
G) A) and C)

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Question 62

Multiple Choice

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Leonardo,who is married but files separately,earns $80,000 of taxable income.He also has $15,000 in city of Tulsa bonds.His wife,Theresa,earns $50,000 of taxable income. If Leonardo instead had $30,000 of additional tax deductions for 2019,his marginal tax rate (rounded) on the deductions would be: (Use tax rate schedule.)

A) 12.00 percent
B) 13.88 percent
C) 22.00 percent
D) 24.00 percent
E) None of the choices are correct

F) C) and D)
G) D) and E)

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Question 63

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Ricky and Lucy are debating several types of taxes.Their debate has focused on the different types of tax rate structures and whether they are "fair." Please define each tax rate structure,provide examples of each structure,and discuss how each structure may be viewed with respect to vertical equity.

In a proportional (flat)tax rate system,the marginal tax rate will always equal the average tax rate.

Which of the following would not be a failure of the horizontal equity concept?

Manny,a single taxpayer,earns $65,000 per year in taxable income and an additional $12,000 per year in city of Boston bonds.What is Manny's current marginal tax rate for 2019? (Use tax rate schedule.)

The main difficulty in calculating an income tax is determining the correct amount of the tax base.

The 9^th Amendment to the U.S.Constitution removed all doubt that a federal income tax was allowed under the U.S.Constitution.

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

Which of the following represents the largest percentage of average state tax revenue?

Nick and Jessica are married taxpayers that file married filing separately.Jessica earns $250,000 of taxable income per year.Nick earns $130,000 of taxable income per year.Using the appropriate U.S.tax rate schedule for year 2019,how much tax does each of them pay? What are their marginal and average tax rates? How much tax would they save,if any,if they filed jointly? (Round the tax rates to two decimal places,e.g.,.12345 as 12.35 percent.)(Use tax rate schedule.)

Jonah,a single taxpayer,earns $150,000 in taxable income and $10,000 in interest from an investment in city of Denver bonds.Using the U.S.tax rate schedule for year 2019,how much federal tax will he owe? What is his average tax rate? What is his effective tax rate? What is his current marginal tax rate? If Jonah earned an additional $40,000 of taxable income,what is his marginal tax rate on this income? (Round the tax rates to two decimal places,e.g.,.12345 as 12.35 percent.)(Use tax rate schedule.)

Marc,a single taxpayer,earns $60,000 in taxable income and $5,000 in interest from an investment in city of Birmingham bonds.Using the U.S.tax rate schedule for year 2019,what is his effective tax rate (rounded) ? (Round your final answer to the nearest whole percent.) (Use tax rate schedule.)