A progressive tax means
a. people who make more money pay less total taxes
b. the marginal tax rate increases as income increases
c. the percentage of income paid out decreases as income increases
d. people who are poor receive the proceeds of the tax
e. the same thing as a flat-rate tax
QUESTION 2The incidence of a tax refers to
a. who receives the benefits from the revenue generated by the tax
b. the changes in the marginal tax rate as income increases
c. whether the tax is regressive, proportional, or progressive
d. who bears the burden of the tax
e. whether the tax is based on the ability-to-pay principle
QUESTION 3If a state government finances treatment facilities for alcoholics out of revenues from a tax on liquor, it is
a. basing its taxation on ability to pay
b. levying a proportional tax
c. able to afford fewer treatment facilities when liquor sales decrease
d. discouraging alcoholics from seeking treatment at government facilities
e. providing a service that the private sector cannot provide
QUESTION 4Taxes collected on the basis of the benefits-received principle
a. provide the states with their main sources of revenue
b. tend to redistribute income from rich to poor
c. collect the same total amount from each individual
d. connect the revenue side of the budget with the spending side of the budget
e. make it possible for government to spend money on activities that markets can't provide
QUESTION 5Which of the following taxes is based on the benefits-received principle?
a. corporate income taxes
b. personal income taxes
c. property taxes
d. gasoline excise taxes
e. user fees that collect the same amount from each person
QUESTION 6Which of the following taxes is based on the ability-to-pay principle?
a. tolls on a bridge
b. income taxes
c. gasoline excise taxes
d. property taxes
e. user fees that collect the same amount from each person
QUESTION 7Which of the following is not based on the benefits-received principle of taxation?
a. charging a fee for use of public golf courses
b. differences between residential and out-of-state college tuition
c. the excise tax on gasoline
d. toll booths on a highway
e. charging a fee per bag to haul away garbage
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