WGU C237 Taxation 1 Review Master Quiz 2024

WGU C237 Taxation 1 Review Master Quiz 2024 The largest source of revenues for the federal government comes from - answer-individual income taxes. Arthur pays tax of $5,000 on taxable income of $50,000 while taxpayer Barbara pays tax of $12,000 on $120,000. The tax is a - answer-proportional tax. Which of the following taxes is regressive? - answer-Federal Insurance Contributions Act (FICA) Sarah contributes $25,000 to a church. Sarah's marginal tax rate is 35% while her average tax rate is 25%. After considering her tax savings, Sarah's contribution costs - answer-$16,250. 25 000 x 35% marginal rate= $8750 savings = 16 250 contribution cost The marginal tax rate is of greater significance in measuring the tax effect for sarah's decision. The marginal tax rate is the percentage that is applied to an incremental amount of taxable income that is added to or subtracted from the tax base. If her marginal tax rate is 35%, she will save 35 cents for every $1 contributed to her church. The average tax rate is simply the total tax liability divided by taxable income. a- marginal tax rate is the tax rate applied to an incremental amount of taxable income that is added to the tax base. The marginal tax rate concept is useful for planning because it measures the tax effect of a proposed transaction. b- The average tax rate is computed by dividing the total tax liability by the amount of taxable income. This represents the average rate of tax for each dollar of taxable income.