Exam (elaborations)
Tax C239 - Recording 1 - Topic 1 - Tax Structures (test fully solved).
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Tax C239 - Recording 1 - Topic 1 - Tax Structures (test fully solved).
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Tax C239 -Recording 1 -
Topic 1 - Tax
Structures (test
fully solved)
What is a Tax? - answer A payment required
by a government that is unrelated to any
specific benefit or service received from the
government
How is a tax calculated? - answer Tax = (Tax
Base)(Tax Rate)
Marginal Tax Rate (MTR) - answer The tax
rate that applies to the next additional
increment of a taxpayer's taxable income.
, MTR Formula - answer ∆Tax / ∆Income =
(MTD-TD) / (Tot Inc-TI)
Average Tax Rate (ATR) - answer The
taxpayer's average level of taxation on each
dollar of taxable income.
ATR Formula - answer TD/ TI
Effective Tax Rate (ETR) - answer The
taxpayer's average rate of taxation on each
dollar of total income (both taxable and non-
taxable).
ETR Formula - answer TD/ (TI+NTI)
Which tax calculation provides a better
depiction of a taxpayer's tax burden? -
answer Effective Tax Rate (ETR)
What is TI? - answer Taxable Income
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