Question 1-12

121 Font 6 Suppose that Susan earns $80 000 annually and George earns $160 000 annually. Suppose Susan pays $16 000 in taxes whereas George pays $32 000 in taxes. Which termn best explains the answer. Assignment #8 / 40 source income tax system? objective Name: a progressive O Tutorial Number. Due the week of March 13 before your scheduled tutorial time. Late assignments will not c. proportional be accepted. Answers for assignment questions will be provided in tutorial only and not posted to Od. arbitrary Brightspace. Content for this assignment can be found in your textbook, Chapters 12 and 13. 7 Which department of government constitutes the greatest component of provincial spending? Write using your own words. answer a. social services source Which statement best describes vertical equity? objective b. health answer a. People should not be required to pay taxes they do not like. source objective b. People should not be required to pay taxes if they do not like the way government spends tax c. transportation and communication revenue. c. People should not be taxed twice on the same income. Od. education d. People with greater ability to pay should pay larger amounts of taxes. S What is the largest component of federal government spending? answer: a. Innovation, Science and Economic Development Canada 2 If Al and Sal earn the same amount of income, which term describes why they should pay the same source: answer amount of taxes? objective b. National Defence source: O a tax incidence objective c. Canada Health and Social Transfer b. vertical equity O d. infrastructure c. horizontal equity 9 Suppose that the government taxes 15 percent of the first $60 000 of income and 45 percent of all Od double taxation answer: income above $60 000, What is the average tax rate for a person who makes $95 000? source: 3 Which statement best summarizes the ability-to-pay principle? a. 25 percent answer. objective source: a. People with the same amount of income should be taxed differently. b. 2.6 percent objective b. People with high incomes should pay the same percentage of their income in taxes as people O with low incomes . c. People with high incomes should pay a smaller percentage of their income in taxes than people d. 26 percent with low incomes 10 What is a payroll tax a tax on ? d. People with high incomes should pay a larger percentage of their income in taxes than people answer: with low incomes. source: Oa. the wages that a firm pays its workers What is an example of horizontal equity? objective Ob. each additional dollar of income earned by a worker answer source a. Taxpayers with a greater ability to pay taxes should pay larger amounts. c. specific goods such as gasoline and cigarettes objective Ob. Taxpayers with similar abilities to pay taxes should pay the same amount of taxes. Od a firm based on the number of workers it has on its payroll c It is a system of taxation through which high-income taxpayers would pay a smaller fraction of 11 their income than would low-income taxpayers. answer What is the second-largest revenue source for provinces? source a. corporate income tax d. It is a system of taxation through which high-income taxpayers would pay a larger fraction of their income than would low-income taxpayers. objective O In which situation is the government's budget said to be in surplus? answer c inheritance tax source: Oa. Government purchases exceed net taxes. d sales tax objective b. Net taxes exceed transfer payments. 12 Which of the following is an example of explicit costs? c Transfers are less than government purchases. answer source a. payments made by the firm to others d. Government tax receipts exceed government spending. objective b. payments made to labour only c. opportunity cost of resources owned by the firm