1. John earned $100,000 last year and paid $10,000 in income taxes. Mark earned $50,000 last year and paid $5,000 in income taxes. This is an example of what principal of taxation?
A) benefits-received principle
B) ability-to-pay principle
C) progressive
D) regressive
E) none of the above
2. The U.S. individual income tax
A) is a proportional tax.
B) requires lower income citizens to pay a higher percentage of taxes.
C) does not differentiate between low and high income citizens.
D) is the largest source of government income.
E) all of the above
3. A proportional tax
A) requires people of higher incomes to pay a higher percentage of tax.
B) is a good example of a benefits-received tax.
C) has nothing to do with income.
D) requires all citizens to pay an equal percentage of their incomes to taxes.
E) all of the above
4. Toll roads are reflective of what principal of taxation?
A) flat tax
B) ability-to-pay principle
C) progressive tax
D) benefits-received principle
E) proportional tax
5. The greatest portion of the budget of the federal government is spent on
A) schools.
B) entitlements such as Medicare and Social Security.
C) national defense.
D) interest on previous debt.
E) public welfare.