Chapter 9:
Sources of Government Revenue
1.
The 1991 luxury tax taxed expensive goods. The resulting higher prices drove customers away, and unemployment soared in some of these industries because the demand for luxury goods was __________ .
a.
unit elastic
b.
inelastic
c.
elastic
d.
cross elastic
2.
The tax on people's earnings, the __________ tax, is a prime example of a complex tax.
a.
corporate
b.
usage
c.
sales
d.
individual income
3.
The gasoline tax is based on the __________ principle of taxation, the principle that those who benefit from government goods and services should pay in proportion to the amount of benefits received.
a.
graduated
b.
wage
c.
ability-to-pay
d.
benefit
4.
The individual income tax is based on the __________ principle of taxation.
a.
wage
b.
ability-to-pay
c.
benefit
d.
proportional
5.
According to the current individual tax tables structure, individuals in higher income tax brackets pay higher marginal taxes than people in lower tax brackets. This is an example of a __________ tax.
a.
progressive
b.
regressive
c.
proportional
d.
flat
6.
The __________ is taxed separately from individuals because it is recognized as a separate legal entity.
a.
proprietorship
b.
partnership
c.
entrepreneurship
d.
corporation
7.
A(n) __________ tax is the tax the government levies on the transfer of property when a person dies. These taxes can range from 18 to 50 percent of the value of the estate.
a.
gift
b.
sales
c.
estate
d.
individual
8.
The category called ___________ revenue are funds collected by one level of government that are distributed to another level of government for expenditures.
a.
intergovernmental
b.
state
c.
local
d.
government level
9.
The summary statement attached to a paycheck that summarizes income, tax withholdings, and other deductions is the __________ statement.
a.
individual withdrawal
b.
government withholding
c.
tax withdrawal
d.
payroll withholding
10.
The second largest source of revenue for state governments is the __________ .
a.
personal income tax
b.
sales tax
c.
corporate income tax
d.
property tax
11.
The concept of a flat tax is a(n) ____________ tax on individual income after a specified threshold has been reached. It was promoted as a way to both simplify taxes and stimulate economic growth.
a.
excise
b.
regressive
c.
progressive
d.
proportional
12.
The main disadvantage of the VAT is that it ____________.
a.
is invisible to consumers
b.
falls on producers
c.
it too progressive
d.
is based on the benefit principle of taxation
13.
The current individual tax code is now ____________.
a.
invisible to consumers
b.
more complicated than at any time in our history
c.
flatter than it was in 1992
d.
based on the benefit principle of taxation
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Unit 1
Unit 2
Unit 3
Unit 4
Unit 5
Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Chapter 10
Chapter 11
Chapter 12
Chapter 13
Chapter 14
Chapter 15
Chapter 16
Chapter 17
Chapter 18
Chapter 19
Chapter 20
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