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C239 - Advanced Tax Concepts TEST questions and answers
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C239 - Advanced Tax Concepts TEST questions and answers
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C239 -Advanced
Tax
Concepts
TEST
questions
,and
answers
A ____________ is a payment required by a
government that is unrelated to any specific
benefit or service received from the
government - answer tax
How is tax calculated? - answer Tax base x
Tax rate
Tax Base - what is being taxed
Tax Rate - the level of tax imposed on the tax
rate - answer
_______ is what is being taxed - answer tax
base
,_________ is the level of tax imposed on the tax
rate - answer tax rate
_________ is the tax rate that applies to the
next additional increment of a taxpayer's
taxable income - answer marginal tax rate
(change) Tax / (change) income
____________ is the taxpayer's average level of
taxation on each dollar of taxable income -
answer average tax rate
total tax / taxable income
_________ is the taxpayer's average rate of
taxation on each dollar of total income (both
taxable and non-taxable) - answer effective
tax rate
total tax / total income
What are the differences between the 3 tax
rate structures?
Proportional, Progressive, Regressive -
answer Proportional (flat) - constant tax rate
throughout the tax base
, Progressive - increasing marginal rate as the
tax base increases
Regressive - decreasing marginal tax rate as
the tax base decreases
What type of tax rate structure is the
following?
a. sales
b. individual income
c. unemployment
d. corporate income - answer a. proportional
b. progressive
c. regressive
d. proportional
What are the types of taxes? - answer 1.
Federal Taxes
a. income
b. employment (soc sec and medicare taxes)
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