#1
Which of the following is a characteristic of a proportional tax?
Tax rate remains constant regardless of income
ExplanationEqual tax rate applied to all income levels
#2
What is the principle of equity in taxation primarily concerned with?
Ensuring fairness and impartiality
ExplanationFair distribution of tax burden
#3
What does the term 'tax incidence' refer to?
The final burden of a tax
ExplanationWho ultimately bears the tax burden
#4
Which type of tax is levied on the transfer of property upon the death of the owner?
Inheritance tax
ExplanationTax on property transferred after death
#5
Which type of tax is imposed on the consumption of certain goods and services?
Excise tax
ExplanationTax on specific goods or services
#6
Which tax base is typically used to calculate property taxes?
Wealth
ExplanationAssessed value of owned property
#7
What is the concept of tax elasticity primarily concerned with?
The responsiveness of tax revenue to changes in tax rates
ExplanationImpact of tax rate changes on revenue
#8
What is the concept of tax buoyancy primarily concerned with?
The responsiveness of tax revenue to changes in economic activity
ExplanationVariation in tax revenue with economic changes
#9
Which tax system imposes a higher tax rate on higher income levels?
Progressive tax
ExplanationTax rate increases with income
#10
Which principle of taxation suggests that individuals should pay taxes in proportion to the benefits they receive from government services?
Benefit principle
ExplanationTaxation based on usage of public services
#11
Which of the following is an example of an indirect tax?
Value-added tax (VAT)
ExplanationTax collected indirectly from consumers
#12
What is the primary objective of using tax incentives in taxation policy?
To encourage specific behaviors or investments
ExplanationPromoting desired economic activities
#13
What is the 'Laffer Curve' used to illustrate in taxation theory?
The relationship between tax rates and tax revenue
ExplanationOptimal tax rate for maximizing revenue