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TEST BANK Byrd & Chen's Canadian Tax Principles Edition, VOLUME 1 Gary Donell, Clarence Byrd, Ida Chen, 9780138097684 (CHAPTERS 1-10)$24.99
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TEST BANK Byrd & Chen's Canadian Tax Principles Edition, VOLUME 1 Gary Donell, Clarence Byrd, Ida Chen, 9780138097684 (CHAPTERS 1-10)
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FINC - Finance
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FINC - Finance
TEST BANK Byrd & Chen's Canadian Tax Principles Edition, VOLUME 1 Gary Donell, Clarence Byrd, Ida Chen, 9780138097684 (CHAPTERS 1-10)
Byrd & Chen's Canadian Tax Principles, Edition, Volume I (Gary Donell, Clarence Byrd, Ida Chen) / Test bank For Byrd & Chen's Canadian Tax Principles, .
Canadian...
TEST BANK
Test Bank for Byrd & Chen's Canadian Tax Principles
(2023-2024 Edition) VOLUME 1.
by Gary Donell, Clarence Byrd, Ida Chen
BYRD & CHEN'S CANADIAN TAX PRINCIPLES
2023-2024 EDITION –VOLUME I
DONELL, BYRD, CHEN
, Table of Contents:-
Chapter 1: Introduction to Federal Taxation in Canada
Chapter 2: Procedures and Administration
Chapter 3: Income or Loss from an Office or Employment
Chapter 4: Taxable Income and Tax Payable for Individuals
Chapter 5: Capital Cost Allowance
Chapter 6: Income or Loss from a Business
Chapter 7: Income or Loss from Property
Chapter 8: Capital Gains and Capital Losses
Chapter 9: Other Income and Deductions, and Other Issues
Chapter 10: Retirement Savings and Other Special Income
Arrangements
,Chapter 1 Introduction to Federal Taxation in Canada
1.1 Online Exercises
1) The major source of federal revenues is the personal income tax. Indicate three other types of taxes that
contribute to federal revenues.
Answer: The other sources of federal revenues that are shown in Figure 1-1 of the textbook are:
• Corporate income tax.
• Non-resident income tax.
• GST.
• Customs and import duties.
• Other excise taxes.
• Employment Insurance premiums.
Type: ES
Topic: Federal revenue sources
2) What is the meaning of "person" when the term is used in the ITA?
Answer: In the ITA, the term "person" refers to an individual, a corporation, a trust or an estate.
Type: ES
Topic: Definition - "Person" ITA 248(1)
3) Briefly describe the procedures used in calculating provincial or territorial income tax for individuals
other than for individuals residing in Quebec.
Answer: Provincial or territorial income tax for individuals are calculated by applying a provincial or
territorial income tax rates to taxable income for federal income tax purposes. Provincial or territorial
personal income tax credits are then applied to the resulting gross income tax. The provincial and
territorial income tax brackets may differ from the federal income tax brackets. In addition, provincial
and territorial personal tax credits may be different than the federal personal tax credits.
Type: ES
Topic: Income tax payable - federal income tax
4) The Canadian income tax system is often used to achieve various economic objectives. Give three
examples that illustrate this point.
Answer: There are many examples. The textbook divides them into resource allocation (e.g., public
health care), distribution effects (e.g., federal GST credit), stabilization effects (e.g., deficit reduction), and
fiscal federalism (e.g., allocations to various levels of government).
Type: ES
Topic: Canadian income tax system - objectives
5) Provide an example of how tax policy can be used to influence resource allocation.
Answer: Examples provided in the textbook are as follows:
• Tax revenues are used to provide public goods and services.
• Excise taxes are used to discourage the consumption of alcohol and tobacco products. There are many
other examples that could be cited.
Type: ES
Topic: Canadian income tax system - objectives
1
, 6) The government pays a Canada Child Benefit to the parents of children who are under 18 years of age.
The payments are reduced by a percentage of income above a certain amount. What objectives are
achieved by this benefit?
Answer: The Canada Child Benefit is designed to assist low income families with the costs of having and
raising children. The government is also encouraging population growth.
Type: ES
Topic: Canadian income tax system - objectives
7) Indicate three disadvantages of a tax system that uses progressive rates.
Answer: Possibilities include that progressive rates:
• Increase the complexity of the system.
• Are unfair to individuals with highly variable levels of income.
• Are unfair to single income family units.
• Lead to pressure for various types of tax concessions.
• Discourage high income individuals from making additional efforts.
• Encourage tax evasion.
Type: ES
Topic: Canadian income tax system - objectives
8) A regressive tax is one that taxes high income individuals at lower effective rates. Explain why a sales
tax levied at a flat rate of 8% can be regressive.
Answer: While the sales tax rate is the same for all individuals without regard to their income level,
lower income individuals normally spend a higher percentage of their total income. Since the sales tax is
charged on the amounts spent, this means that the sales tax paid by lower income individuals represents
a larger percentage of their total income. As a consequence, they are generally considered to be
regressive in nature.
Type: ES
Topic: Canadian income tax system - regressive vs progressive rates
9) Distinguish between horizontal equity and vertical equity as these terms are used in describing tax
systems.
Answer: Horizontal equity is achieved when taxpayers in similar economic circumstances are subject to
similar levels of tax. Vertical equity is achieved when taxpayers in different economic circumstances are
not subject to similar levels of tax.
Type: ES
Topic: Canadian income tax system - objectives
2
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