Test Bank for Principles of Taxation for Business and Investment Planning 2025 Edition Evergreen Release by Sally Jones Chapter 11 - 18

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HillfEducation.fAllfrightsfreserved.fNofreproductionforfdistributionfwithoutfthefpriorfwrittenfc
onsentfoff
McGraw-HillfEducation.f
Chapterf02f
PolicyfStandardsfforfafGoodfTaxf
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f

Truef/fFalsefQuestionsf
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1.f
Aftaxfmeetsfthefstandardfoffsufficiencyfiffitfisfeasyfforfpeopleftofpayftheftax.ff
ff

TrueffffFalsef
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2.fTheffederalfgovernmentfisfnotfrequiredftofpayfinterestfonfthefnationalfdebt.ff
ff

TrueffffFalsef
ff

3.fAfstaticfforecastfoffthefrevenuefeffectfoffaftaxfratefchangefassumesfthatftheftaxfbasefdoesfnotf
change.ff
ff

TrueffffFalsef
ff

4.fAfdynamicfforecastfoffthefrevenuefeffectfoffaftaxfratefchangefassumesfthatftheftaxfbasefdoesfn
otf
change.ff
ff

TrueffffFalsef
ff

5.fTheffederalfSocialfSecurityftaxfburdenfonfemployeesfhasfnotfincreasedfsincef1990fbecauseft
heftaxf
ratefhasfnotfincreasedfsincefthatfyear.ff
ff

TrueffffFalsef
ff

6.fIffStatefHfincreasesfitsfsalesftaxfratefbyf1%,fitsfsalesftaxfrevenuefmustfalsofincreasefbyf1%.ff
ff

TrueffffFalsef
ff

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7.f
ThefcityfoffBernefrecentlyfenactedfaf10%ftaxfonfthefpricefoffafsubwayfticket.fConsequently,fMrs

,.f
Lanefnowfwalksftofworkfinsteadfofftakingfthefsubway.fHerfbehaviorfillustratesfthefsubstitution
f

effectfoffaftaxfincrease.ff
ff

TrueffffFalsef
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8.fJurisdictionfPfrecentlyfincreasedfitsfincomeftaxfrate.fAftaxpayerfwhofreactsftofthefincreasefby
f

workingfharderftofearnfmorefincomefisfdemonstratingfthefincomefeffectfoffthefratefincrease.ff
ff

TrueffffFalsef
ff

9.fAccordingftofsupply-sidefeconomicftheory,fafdecreasefinftaxfratesfforfhigh-
incomefindividualsf
couldfactuallyfcausefanfincreasefinftaxfrevenue.ff
ff

TrueffffFalsef
ff

10.fSupply-
sidefeconomicftheoryfholdsfthatfpeoplefwhofbenefitffromfaftaxfratefreductionfwillfspendf
theirftaxfwindfallfonfconsumptionfgoods.ff
ff

TrueffffFalsef
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11.fStatefuseftaxesfarefmorefconvenientfforfindividualfconsumersfthanfstatefsalesftaxes.ff
ff

TrueffffFalsef
ff

12.fThefInternalfRevenuefService'sfcostfoffcollectingf$100fofftaxfrevenuefisfaboutf$3.ff
ff

TrueffffFalsef
ff

13.fAfconvenientftaxfhasflowfcompliancefcostsfforftaxpayersfandflowfcollectionfandfenforceme
ntfcostsf
forfthefgovernment.ff
ff

TrueffffFalsef
ff

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14.fAccordingftofthefclassicalfconceptfoffefficiency,fanfefficientftaxfshouldfbefneutralfinfitsfeffect
fonf

freefmarketfallocationsfoffeconomicfresources.ff
ff

TrueffffFalsef
ff

,15.fAccordingftofthefKeynesianfconceptfoffefficiency,fanfefficientftaxfshouldfbefneutralfinfitsfeff
ectfonf
freefmarketfallocationsfoffeconomicfresources.ff
ff

TrueffffFalsef
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16.fAftaxfmeetsfthefstandardfoffefficiencyfiffitfgeneratesfenoughfrevenueftofpayfforfthefpublicfgo
odsf
andfservicesfprovidedfbyfthefgovernment.ff
ff

TrueffffFalsef
ff

17.fAfprovisionfinftheftaxflawfdesignedftofencouragefafspecificfeconomicfbehaviorfisfaftaxfprefe
rence.ff
ff

TrueffffFalsef
ff

18.fAfgoodftaxfshouldfresultfinfeitherfhorizontalforfverticalfequityfacrossftaxpayers.ff
ff

TrueffffFalsef
ff

19.fChangesfinftheftaxflawfintendedftofmakefthefmeasurementfofftaxablefincomefmorefprecisef
usuallyf
makeftheftaxflawflessfcomplex.ff
ff

TrueffffFalsef
ff

20.fVerticalfequityffocusesfonfmeasurementfofftheftaxfbase,fandfhorizontalfequityffocusesfonfth
eftaxf
ratefstructure.ff
ff

TrueffffFalsef
ff

21.fTaxfsystemsfwithfregressivefratefstructuresfresultfinfafproportionallyfheavierftaxfburdenfo
nfpersonsf
withfsmallerftaxfbases.ff
ff

TrueffffFalsef
ff

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22.fAfprogressivefratefstructurefandfafproportionatefratefstructurefbothfresultfinfverticalfequit
yfacrossf
taxpayers.ff
ff

, TrueffffFalsef
ff

23.fThefU.S.findividualfincomeftaxfhasfalwaysfusedfafprogressivefratefstructure.ff
ff

TrueffffFalsef
ff

24.fThefdecliningfmarginalfutilityfoffincomefacrossfindividualsfcanfbefmeasuredfempirically.ff
ff

TrueffffFalsef
ff

25.fTaxfliabilityfdividedfbyftaxablefincomefequalsfmarginalftaxfrate.ff
ff

TrueffffFalsef
ff

26.fIffaftaxfhasfafproportionatefratefstructure,faftaxpayer'sfmarginalfratefandfaveragefratefarefe
qual.ff
ff

TrueffffFalsef
ff

27.fIffaftaxfhasfafprogressivefratefstructure,faftaxpayer'sfaveragefratefisfgreaterfthanfherfmargin
alfrate.ff
ff

TrueffffFalsef
ff

28.fTheftheoryfoffdistributionalfjusticefisfafrationalefforfafprogressivefincomeftaxfsystem.ff
ff

TrueffffFalsef
ff

29.fIndividualsfwhofbelievefthatfaftaxfsystemfisffairfareflessflikelyftofcheatfonftheirftaxesfthanf
individualsfwhofbelievefthatfthefsystemfisfunfair.ff
ff

TrueffffFalsef
ff

30.fManyftaxpayersfbelievefthefincomeftaxfsystemfisfunfairfbecausefitfisfsofcomplicated.ff
ff

TrueffffFalsef
ff

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fffffffffffInvestmentfPlanningf2016f19thfEditionfJones

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MultiplefChoicefQuestionsf
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31.fGovernmentfofficialsfoffCountryfZfestimatefthatfnextfyear'sfpublicfprogramsfwillfcostf$19fm
illionf
butfthatftaxfrevenuesfwillfbefonlyf$15fmillion.fThefofficialsfcouldfavoidfafdeficitfnextfyearfbyf
adoptingfwhichfofftheffollowingffiscalfstrategies?ff
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