Question

1. which type of tax increases as income increases? a) regressive b) progressive c) proportional d) sales
2. which tax places a higher burden on low - income earners compared to high - income earners? a) progressive b) regressive c) proportional d) luxury
3. a flat income tax rate that is the same for everyone is an example of: a) progressive b) regressive c) proportional d) hidden
4. the u.s. federal income tax system is primarily: a) progressive b) regressive c) proportional d) indirect
5. a sales tax is generally considered: a) progressive b) regressive c) proportional d) direct
6. property taxes are usually based on: a) owners income b) property value c) flat rate d) residents in home
7. which of the following is a regressive tax? a) federal income b) luxury c) sales d) estate
8. which type of tax is sometimes called a flat tax? a) progressive b) regressive c) proportional d) indirect
9. in a proportional tax system, if income doubles, tax paid: a) less than doubles b) doubles c) more than doubles d) stays the same
10. which is most likely progressive? a) payroll b) income c) gas d) sales
11. the ability - to - pay principle states taxes should be based on: a) benefits b) income c) consumption d) sales
12. the benefits - received principle means people pay based on: a) income b) services used c) equal division d) flat rate
13. which principle supports gas taxes for roads? a) ability - to - pay b) benefits - received c) equal - share d) fairness
14. federal income tax best represents which principle? a) benefits - received b) ability - to - pay c) equal - share d) regressive
15. a toll road follows which principle? a) ability - to - pay b) benefits - received c) proportional d) progressive
16. which argues wealthier individuals should contribute more? a) ability - to - pay b) benefits - received c) equal - share d) sales
17. which justifies charging higher - income earners more? a) benefits - received b) ability - to - pay c) user - pays d) equality
18. under benefits - received, who should fund schools? a) everyone b) high - income c) local residents d) federal gov
19. which is not based on ability - to - pay? a) property b) progressive income c) sales d) luxury

Explanation:

1. Progressive Tax: A progressive tax increases as income increases. For example, higher - income brackets pay a higher percentage of their income in tax.
2. Regressive Tax: A regressive tax places a higher burden on low - income earners. Since low - income earners spend a larger proportion of their income on taxed goods (e.g., sales tax on basic necessities), the tax takes a larger share of their income.
3. Proportional Tax: A flat income tax rate (same for everyone) is a proportional tax. The tax rate is constant regardless of income level.
4. Progressive Tax: The U.S. federal income tax system has different tax brackets. As income increases, the tax rate for the additional income (marginal tax rate) can increase.
5. Regressive Tax: Sales tax is regressive. Low - income earners spend a higher proportion of their income on taxable goods, so the sales tax is a larger percentage of their income.
6. Property Value: Property taxes are based on the value of the property (e.g., real estate).
7. Sales Tax: Sales tax is regressive (as explained in 5). Federal income tax is progressive, luxury tax is often on high - end goods (not regressive in the traditional sense for all income groups), and estate tax is on large estates (not regressive).
8. Proportional Tax: A “flat tax” is a proportional tax where the tax rate is the same for all income levels.
9. Doubles: In a proportional tax system, if income doubles, the tax paid doubles because the tax rate is constant (\(T = r\times I\), where \(T\) is tax, \(r\) is the tax rate, and \(I\) is income. If \(I\) becomes \(2I\), \(T\) becomes \(2T\)).
10. Income Tax: Income tax (especially a progressive income tax) is most likely progressive. Payroll tax has a cap (not fully progressive), gas and sales taxes are regressive.
11. Income: The “ability - to - pay” principle states that taxes should be based on income. Those with higher income should pay more in taxes.
12. Services used: The “benefits - received” principle means people pay based on the services they use. For example, toll roads (those who use the road pay the toll).
13. Benefits - received: Gas taxes for roads follow the benefits - received principle. Those who use gas (and thus the roads) pay the tax.
14. Ability - to - pay: Federal income tax is based on the ability - to - pay principle. Higher - income earners pay more.
15. Benefits - received: A toll road follows the benefits - received principle. Only those who use the road pay the toll.
16. Ability - to - pay: The ability - to - pay principle argues that wealthier individuals should contribute more because they have a greater capacity to pay.
17. Ability - to - pay: Charging higher - income earners more is justified by the ability - to - pay principle.
18. Everyone: Under the benefits - received principle, if everyone benefits from schools (e.g., a literate workforce benefits society as a whole), everyone should fund schools.
19. Sales Tax: Sales tax is not based on ability - to - pay. It is based on consumption. Property tax (in some cases related to ability - to - pay if property is related to income), progressive income tax is based on ability - to - pay, and luxury tax (on high - end goods) can be seen as having some relation to ability - to - pay (as luxury goods are more accessible to higher - income groups).

Answer:

1. B. Progressive
2. B. Regressive
3. C. Proportional
4. A. Progressive
5. B. Regressive
6. B. Property value
7. C. Sales
8. C. Proportional
9. B. Doubles
10. B. Income
11. B. Income
12. B. Services used
13. B. Benefits - received
14. B. Ability - to - pay
15. B. Benefits - received
16. A. Ability - to - pay
17. B. Ability - to - pay
18. A. Everyone
19. C. Sales