1. A progressive tax system taxes incremental income at progressively higher rates.

True

False

2. Congress intended preferential tax treatment on capital gains, recognizing that offering an incentive to capital investments is healthy for the economy.

True

False

3. Municipal bonds are debt obligations of the states, municipalities and political subdivisions. They are exempt from federal taxation.

True

False

4. The taxation of proprietorships is about the same as that of corporations.

True

False