TAX 4001 EXAM QUESTIONS WITH
VERIFIED ANSWERS. A+ GRADE
2025/2026.
What are the 2 components of taxes? - ANS Tax rate and tax base
What are the 3 types of tax rates? - ANS Proportional, progressive and regressive
Proportional Taxes - ANS the rate of tax remains constant over the tax base (sales tax)
Progressive taxes - ANS Tax rates increase as the tax base grows larger (Federal income, gift
and estate tax)
Regressive taxes - ANS Tax rates decrease as the tax base grows larger (Federal employment
taxes such as FUTA and FICA)
What are the different tax bases? - ANS Transactions, Property or wealth, Privileges and
rights, and income
What does Transaction taxes include? - ANS sales and transfers of wealth
What does Property or wealth taxes include? - ANS real estate taxes and ownership of
property
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
VERIFIED ANSWERS. A+ GRADE
2025/2026.
What are the 2 components of taxes? - ANS Tax rate and tax base
What are the 3 types of tax rates? - ANS Proportional, progressive and regressive
Proportional Taxes - ANS the rate of tax remains constant over the tax base (sales tax)
Progressive taxes - ANS Tax rates increase as the tax base grows larger (Federal income, gift
and estate tax)
Regressive taxes - ANS Tax rates decrease as the tax base grows larger (Federal employment
taxes such as FUTA and FICA)
What are the different tax bases? - ANS Transactions, Property or wealth, Privileges and
rights, and income
What does Transaction taxes include? - ANS sales and transfers of wealth
What does Property or wealth taxes include? - ANS real estate taxes and ownership of
property
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED