5. Both economic and social considerations can be used to justify: a. Favorable tax treatment for accident and health plans provided for employees and financed by employers. b. Disallowance of any deduction for expenditures deemed to be contrary to public policy (e.g., fines, penalties, illegal kickbacks, bribes to government officials). c. Various tax credits, deductions, and exclusions that are designed to encourage taxpayers to obtain additional education. d. Allowance of a deduction for state and local income taxes paid. e. None of these. 6. Two years ago, State Y enacted a new income tax credit for college prep materials. The credit is available to individuals and is equal to 40 percent of the cost of the items. The credit may not exceed $50 in any year. The State Y Director of Finance has discovered this year that the amount of credit claimed is far higher than expected Which principle of good tax policy might not have been considered in designing this tax which caused the original cost estimate to be too low? a. Equity b. Simplicity. c. Economy in collection. d. Minimum tax gap. 7. Which of the following taxes is only paid by the employer? a. FICA b. FUTA c. Social Security tax d. Medicare tax 8. Tax bills are handled by which committee in the U.S. House of Representatives? a. Taxation Committee b. Ways and Means Committee c. Finance Committee d. Budget Committee e. None of these 9. Which of the following sources has the highest tax validity? a. Revenue Ruling b. Revenue Procedure c. Regulations d. Internal Revenue Code section e. None of these 10. The research process should always begin with a tax service. a. True b. False