PRINCIPLES OF TAXATION FOR BUSINESS
AND INVESTMENT PLANNING 2024 27TH
EDITION SALLY JONES SHELLEY RHOADES-
CATANACH SOLUTION MANUAL
CERTIFICATION REVIEW SET 2026
ANSWERS GUARANTEED PASS
⫸ Incidence of a tax. Answer: Final burden of a tax
⫸ Tax loophole. Answer: Oversight in the tax law allowing a taxpayer
to avoid paying certain taxes
⫸ Sales tax. Answer: General state or city tax levied on a product at the
time of sale
⫸ Tax return. Answer: Annual report filed by taxpayer to state and
Federal government
⫸ Benefit principle of taxation. Answer: Belief that taxes should be paid
according to benefits received regardless of income
⫸ Ability to pay principle of taxation. Answer: Belief that taxes should
be paid according to level of income, regardless of benefits received
, ⫸ Proportional tax. Answer: Tax in which percentage of income paid in
tax is the same regardless of the level of income
⫸ Average tax rate. Answer: Total taxes paid divided by the total
taxable income
⫸ Medicare. Answer: Federal health care program for senior citizens
⫸ Progressive Tax. Answer: Tax in which the percentage of income
paid in tax rises as the level of income rises
⫸ Marginal tax rate. Answer: Tax rate that applies to the next dollar of
taxable income
⫸ Regressive tax. Answer: Tax in which the percentage of income paid
in tax goes down as income rises
⫸ IRS. Answer: Dept. of the US Treasury that collects tax
⫸ Payroll withholding system. Answer: System that automatically
deducts income taxes from paychecks on a regular basis
⫸ Indexing. Answer: Adjustment of tax brackets to offset the effects of
inflation
AND INVESTMENT PLANNING 2024 27TH
EDITION SALLY JONES SHELLEY RHOADES-
CATANACH SOLUTION MANUAL
CERTIFICATION REVIEW SET 2026
ANSWERS GUARANTEED PASS
⫸ Incidence of a tax. Answer: Final burden of a tax
⫸ Tax loophole. Answer: Oversight in the tax law allowing a taxpayer
to avoid paying certain taxes
⫸ Sales tax. Answer: General state or city tax levied on a product at the
time of sale
⫸ Tax return. Answer: Annual report filed by taxpayer to state and
Federal government
⫸ Benefit principle of taxation. Answer: Belief that taxes should be paid
according to benefits received regardless of income
⫸ Ability to pay principle of taxation. Answer: Belief that taxes should
be paid according to level of income, regardless of benefits received
, ⫸ Proportional tax. Answer: Tax in which percentage of income paid in
tax is the same regardless of the level of income
⫸ Average tax rate. Answer: Total taxes paid divided by the total
taxable income
⫸ Medicare. Answer: Federal health care program for senior citizens
⫸ Progressive Tax. Answer: Tax in which the percentage of income
paid in tax rises as the level of income rises
⫸ Marginal tax rate. Answer: Tax rate that applies to the next dollar of
taxable income
⫸ Regressive tax. Answer: Tax in which the percentage of income paid
in tax goes down as income rises
⫸ IRS. Answer: Dept. of the US Treasury that collects tax
⫸ Payroll withholding system. Answer: System that automatically
deducts income taxes from paychecks on a regular basis
⫸ Indexing. Answer: Adjustment of tax brackets to offset the effects of
inflation
