STAYER ECO 450 Week 7 Quiz 5 Ch 10
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1. Taxes simultaneously ration and finance government goods and services. 2. The federal government finances only half of its expenditures with taxes.
3. The benefit principle argues that the means of financing government goods and services should be linked to the benefits received from those goods and services.
4. Horizontal equity is achieved when individuals of the same economic capacity pay the same amount of taxes over a given period.
5. A flat-rate income tax is a proportional tax on an income base.
6. The marginal tax rate will eventually exceed the average tax rate if the tax rate structure is proportional.
7. The marginal tax rate for a payroll tax is 7 percent on all wages up to $ 60,000 per year. The marginal tax rate for wages in excess of $ 60,000 per year is zero. The payroll tax is therefore a regressive tax.