In a regressive tax system ?

Related Mcqs:

1. Imagine there is no tax on income up to Rs 1000 after that there is a tax of 505 what is the average tax rate on an income of Rs 20,000 ?

   A. Rs 50000
   B. 20%
   C. 25%
   D. Rs 10000

2. The property tax wealth tax inheritance tax and income taxes such as persona and corporate taxes are ?

   A. indirect taxes
   B. direct taxes
   C. inelastic
   D. value-added tax

3. From the sale of capital assets tax is levied on profits. What this tax is called ?

   A. Profit tax
   B. Capital gains tax
   C. Excise duty
   D. Capital tax

4. A tax which is paid by the person on whom the tax is incident is called a ?

   A. Local tax
   B. Indirect tax
   C. Direct tax
   D. Rate

5. The appropriate tax rate to consider gauging how much the tax system distorts incentives and decision making is the ?

   A. Proportional tax rate
   B. average tax rate
   C. marginal tax rate
   D. vertical tax rate
   E. horizontal tax rate

6. The appropriate tax rate to consider judging the vertical equity of a tax system is the ?

   A. marginal tax rate
   B. average tax rate
   C. horizontal tax rate
   D. proportional tax rate

7. According to the Laffer curve, as tax rates increase tax revenue ?

   A. initially increase and then decrease
   B. decrease continuously.
   C. rise continuously
   D. initially decrease and then increase.

8. A tax placed on a good that is a necessity for consumers will likely generate a tax burden that ?

   A. falls more heavily on sellers
   B. falls entirely on sellers
   C. falls more heavily on buyers.
   D. is evenly distributed between buyers and sellers.

9. According to the Laffer curve as tax rates increase tax revenue ?

   A. initially increase and then decrease
   B. decrease continuously
   C. rise continuously
   D. initially decrease and then increase

10. If the income tax rate changes from 30% to 40% on income over Rs30,000 and a person’s income is Rs 31,000 then her marginal tax rate is ?

    A. 30%
    B. 10%
    C. 70%
    D. 40%