Congress passed the alternative minimum tax in order to
a. impose a tax on needy families without taxing their actual income.
b. keep individuals from exploiting deductions and credits to cut their income tax below what is appropriate for their income.
c. prevent large corporations from offshoring to reduce their taxes.
d. reduce the tax burden on low income families.
e. reduce the tax burden on the wealthy.
Question -2-The alternative minimum tax is the parallel tax system with
a. a more limited set of tax preferences than the regular income tax.
b. more allowable deductions and credits.
c. a lower rate of taxation, designed for individuals falling below the poverty line.
d. limits on the rate at which students are taxed on summer employment.
e. greater flexibility for the wealthy.
Question -3-The complexity of the tax codes is largely due to the
a. aggressive nature of interest groups.
b. huge number of people and situations in the nation.
c. large number of tax code writers.
d. need to create loopholes for large corporations.
e. scarcity of qualified accountants and tax specialists.
Question -4-A tax credit is a sum that is subtracted from
a. what one owes in taxes.
b. the tax exempt portion of ones income.
c. ones gross income.
d. ones net income for certain expenses.
e. the amount one paid in interest on loans.
Question -5-Subtracting the interest on a mortgage from ones taxable income is an example of a(n)
a. credit.
b. deduction.
c. exemption.
d. security.
e. withholding.
Quick Reply
