Taxes on Consumption and Wealth PDF

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Chapter 21 Fundamental Tax Reform: Taxes on Consumption and Wealth

M ultiple Ch Choice oice Questions

1.

A tax levied on an individual's total lifetime acquisitions from inheritances and gifts is known as

A. inheritance tax. B. death tax.

D. unified transfer tax. 2.

Why might an individual set up trusts?

B. for lower insurance premiums. C. to insure the security of a loan. D. to have a steady stream of income during retirement. 3.

A tax, in which amounts transferred as gifts and bequests are jointly taken into account, is known as

A. inheritance tax. B. death tax. C. accessions tax.

4.

The largest source of tax revenues for states is

B. motor fuel. C. alcoholic beverages. D. tobacco. 5.

The Value Added Tax (VAT) is

A. not often used in the United States. B. a percentage tax. C. added at each stage to production.

6.

A unit tax is

A. levied at different rates on the purchase of different commodities. B. less than 0. C. a percentage of the value of the purchase.

7.

Which of the following is an unit excise tax?

A. A tax of 15%

C. An ad valorem tax of $3.00 D. An income tax of $3.00 8.

Consumption taxes are generally viewed as

. B. progressive. C. simple to calculate. D. multiplicative.

9.

A tax on consumption for those who are nonsavers

B. causes income gains to increase dramatically. C. would be preferred to a tax on wealth. D. makes it difficult to tell what the result for the nonsavers would be. 10. Who pays a consumption tax?

A. People who purchase goods B. Firms who purchase goods C. The elderly when they purchase goods ....