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1. Who observed that "in this world nothing is certain but death and taxes"?
a.
Mark Twain
b.
P.T. Barnum
c.
Ben Franklin
d.
Richard Nixon
2. In 1789, the average American paid approximately what percent of income in taxes?
a.
5%
b.
15%
c.
33%
d.
50%
3. Today the typical American pays approximately what percent of income in taxes, including all federal, state, and local
taxes?
a.
5 percent
b.
25 percent
c.
35 percent
d.
50 percent
4. In 1789 the percentage of the average American’s income that went to pay taxes was about
a.
5%. Today it is about 50%.
b.
5%. Today it is about 25%.
c.
50%. Today it is about 33%.
d.
25%. Today it is about 33%.
5. From the time of Benjamin Franklin to the present, the percentage of the average American’s income that goes to pay
taxes has
a.
decreased from about 20 percent to about 10 percent.
b.
remained constant at about 10 percent.
c.
has risen from less than 2 percent to about 33.3 percent.
d.
has risen from less than 5 percent to about 25 percent.
6. Which of the following statements is correct?
a.
Equity is more important than efficiency as a goal of the tax system.
b.
Efficiency is more important than equity as a goal of the tax system.
c.
Both equity and efficiency are important goals of the tax system.
d.
Neither equity nor efficiency is an important goal of the tax system.
7. Citizens expect the government to provide various goods and services making taxes
a.
inefficient.
b.
equitable.
c.
inevitable.
d.
intolerable.
8. Taxes can be justified if the government uses the revenue to
(i)
provide public goods such as national defense.
(ii)
clean up negative externalities such as water pollution.
(iii)
regulate a common resource such as fish in a public lake.
(iv)
provide goods with positive externalities such as medical research.
a.
(ii) only
b.
(ii) and (iii) only
c.
(i), (ii), and (iii) only
d.
(i), (ii), (iii), and (iv)
9. The largest source of federal revenue in the United States is:
a.
Social insurance tax
b.
the corporate income tax
c.
the individual income tax
d.
Foreign aid to the U.S.
