Multiple Choice Quiz


1	The federal personal income tax represents ____ of all federal taxes collected
		A)	nearly 95%
		B)	slightly less than half
		C)	around one-quarter
		D)	less than 1%


2	Withholding is the means by which
		A)	you, your employer and the government estimate how much from a paycheck that will be owed in taxes so you don't owe it all at once when you file on April 15th.
		B)	the federal government takes more from everyone than it is entitled to from the tax laws.
		C)	people pay their sales anticipated taxes.
		D)	people pre-pay their estate taxes.


3	Which of the following figure, in some way, into how much tax you owe for a year
		A)	exemptions
		B)	deductions
		C)	credits
		D)	all of these


4	The question of whether people itemize or not determines the level of ______ they get
		A)	deductions
		B)	exemptions
		C)	credits
		D)	AGI


5	The filing status of a household depends on
		A)	whether they have enough deductions to itemize.
		B)	whether the adults in the household are married .
		C)	whether there are children in the household.
		D)	b) and c)


6	If marginal tax rates rise then the tax is called _______ and contributes to the concept of _________ .
		A)	neutral; simplicity
		B)	efficient; neutrality
		C)	progressive; vertical equity
		D)	progressive; horizontal equity


7	The most vivid example of the equity-simplicity tradeoff exists when trying to figure out the proper level of tax for
		A)	wages.
		B)	Salaries.
		C)	Interest.
		D)	capital gains.


8	Taxes that do not favor one type of income over another are called
		A)	vertically equitable.
		B)	neutral.
		C)	cost-effective.
		D)	inefficient.


9	Empirical evidence on the effect of marginal tax rates on work suggests that
		A)	a reduction in marginal tax rates would reduce work effort.
		B)	an increase of marginal tax rates by 8% would reduce work effort by 20%.
		C)	an increase of marginal tax rates by 8% would reduce work effort by 1%.
		D)	the supply curve for labor is almost horizontal.


10	An across-the-board cut in marginal tax rates by the same percentage (a 10% rate becomes a 9% rate and a 20% rate becomes a 18% rate and so on) generally favors
		A)	people at the low end of the income scale .
		B)	people with little taxable income.
		C)	people who owe no tax.
		D)	people at the high end of the income scale.

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