1. Targeted tax incentives are attractive to politicians because they don\'t pre
ID: 428042 • Letter: 1
Question
1. Targeted tax incentives are attractive to politicians because
they don't precipitate the influx pollution inducing industries
they retard progressivity
they work more quickly than lowering tax rates
they increase progressivity
none of the above
2. The matter of whether the sales tax is regressive has been debated often. And it is mostly believed to be regressive. However, if one is to be clear about its regressive nature, one has to decide to do calculations using
purchases made during the year
life-time income
annual income
inherited wealt
none of the above
3. The best example of an easily hidden tax because citizens are not aware of how much it amounts to is
the head tax
the estate tax
the intangible tax
the income tax
none of the above
According to Brunori, the corporate income tax accounts for less than ____ per cent of state tax revenue.
1
2
3
4
In taxation, horizontal inequity refers to:
False
the concept that the tax system should treat similarly situated taxpayers the same.
the concept that similarly situated taxpayers are often treated differently because some groups in the taxpayer community receive preferential treatment.
the concept that differently situated taxpayers should pay different amounts of tax.
the concept that be at the same tax rate and, above all, pay the same amount of tax.
none of the above
David Brunori believes that targeted tax incentives are an excellent and, above all, equitable way for states to attract business to a state.
True
they don't precipitate the influx pollution inducing industries
Explanation / Answer
1. Targeted tax incentives are attractive to politicians because -
Ans. - they work more quickly than lowering tax rates
The reason - Politicians mainly use tax incentives to target some businesses where they want to encourage, create, expand or change the location of firms. The main target is steering economy by lowering costs for doing those businesses.
2. The matter of whether the sales tax is regressive has been debated often. And it is mostly believed to be regressive. However, if one is to be clear about its regressive nature, one has to decide to do calculations using
Ans. - purchases made during the year
The reason - Sales tax is generally charged for purchase or exchange of any taxable goods, charged as a percentage of the value of the good. It is an additional tax which has to be paid during the purchase of any goods/services.
3. The best example of an easily hidden tax because citizens are not aware of how much it amounts to is
Ans. - the income tax
The reason - For the income tax citizens get less dividends and salary.
4. According to Brunori, the corporate income tax accounts for less than ____ percent of state tax revenue.
Ans. - 2
The reason - The state corporate income tax accounts less than tax revenue for political pressure. For the political reason, the income tax structure is to be made in a manner to increase economic development.
5. In taxation, horizontal inequity refers to:
Ans. - the concept that the tax system should treat similarly situated taxpayers the same.
The reason - Horizontal inequity is an economic theory that all people should pay same taxes whose income and assets are same. It is the neutral process in taxation to consider individuals equal in the tax system.
6. David Brunori believes that targeted tax incentives are an excellent and, above all, equitable way for states to attract business to a state.
Ans. - True.
The reason - The targeted tax incentives which are taken by politicians of every state is needed for economic development of the state. It decrease the tax rate and helps to create, expand or change the location of firms for new business in the state.
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