Chapter 1

Chapter 1 - Introduction To TaxationChapter 1 - Introduction To Taxation

Student: ___________________________________________________________________________

1. The FICA tax (Medicare component) on wages is progressive since the tax due increases as wages increase.

True False

2. The Federal estate and gift taxes are examples of progressive taxes.

True False

3. The Federal excise tax on cigarettes is an example of a proportional tax.

True False

4. Currently, the Federal income tax is more progressive than it ever has been in the past.

True False

5. Federal excise tax is no longer imposed on jewelry.

True False

6. The tax on hotel occupancy is subject to both Federal and state excise taxes.

True False

7. The Federal gas-guzzler tax applies only to automobiles manufactured overseas and imported into the U.S.

True False

8. Like the Federal counterpart, the amount of the state excise taxes on gasoline do not vary from state to state.

True False

9. The states that impose a general sales tax also have a use tax.

True False

10. Sales made by mail order are not exempt from the application of a general sales (or use) tax.

True False

11. Two persons who live in the same state but in different counties may not be subject to the same general sales tax rate.

True False

12. States impose either a state income tax or a general sales tax, but not both types of taxes.

True False

13. A safe and easy way for a taxpayer to avoid local and state sales taxes is to have the purchase sent to an address in another state that levies no such taxes.

True False

14. The principal objective of the FICA tax is to provide some measure of retirement security.

True False

15. Currently, the tax base for the Medicare component of the FICA is not limited to a dollar amount.

True False

16. A parent employs his twin daughters, age 19, in his sole proprietorship. The...