Types of Taxes
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by Stephanie Foy
| 5 Questions
Note from the author:
Follows personal finance domain of GSE. Standard 3
1
1
A tax in which all income groups pay the same percentage is known as a
proportional tax
regressive tax
progressive tax
punitive tax
2
1
Assume that Walt earns $600,000 per year and Sam earns $50,000 per year. Walt pays a higher pecentage of his income in taxes than Sam. What type of tax does this describe?
sales tax
proportional tax
regressive tax
progressive tax
3
1
Jared earns $30,000 a year. He pays a higher percentage of his income in taxes than does his brother who earns $300,000 a year. What type of tax is this?
regressive tax
poverty tax
progressive tax
proportional tax
4
1
Many economists consider increases in sales taxes to be an unfair burden on the poor. Why is this?
The poor will have less incentive to purchase necessities.
The sales tax represents a smaller portion of a poor person's income than a wealthy person's income.
Sales taxes are not fairly redistributed to programs that help the poor.
The sales tax represents a larger portion of a poor person's income than a wealthy person's income.
5
1
Assume that the economy enters a recession and property values fall, resulting in lower property tax revenue. Which of the following would directly result from lower property tax revenue?
There will be cuts to local spending on public safety, roads, and schools.
There will be increases in local spending on public safety, roads, and schools.
There will be cuts to defense and national security spending by the federal government.
There will be increases in defense spending by the federal government to offset the recession.
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