Individual Income Tax
CH1
10.
a) State Income - regressive b) Federal State Tax – Progressive (larger the state; larger the tax) c) Corporate & franchise tax - Progressive d) Property tax – Proportional (value of property is taxed at flat rate) e) State Sales Tax – Proportional
12.
Who uses a) Property Tax – State Local b) Excise Taxes – All three (State, federal, and local) c) Sales – State and Local d) Income Tax – Federal, State, Local e) Employment – Federal, State, and Sometimes Local
15.
* Primary objective of federal income tax is to raise revenues for government operations. * secondary objectives of federal income tax include: * to stimulate and encourage certain activities by providing tax credits or allowing a deduction to taxable income. These are activities such as: * Encourage research activities that will in turn strengthen the competitiveness of U.S companies (credit provided) * Encourage Venture Capital for small businesses (reduced tax rate) * Stimulate investment (tax deduction for small business equipment) * to encourage or discourage certain socially desirable or undesirable activities, such as: * charitable contributions (deductible) * claiming of deduction for any activity contrary to public policy is prohibited.
17.
Taxpaying entities generally are required to pay income taxes on their taxable income. Flow-through entities, on the other hand, generally do not directly pay income taxes but merely pass the income on to a tax paying entity.Flow-through entity is a legal entity where income "flows through" to investors or owners; that is, the income of the entity is treated as the income of the investors or owners (Taxpaying entities) and is not subject to a double taxation.
20.
“Double taxation” on C Corporations refers to the corporation paying income tax on its taxable income and then shareholders paying income tax on any dividends paid
10.
a) State Income - regressive b) Federal State Tax – Progressive (larger the state; larger the tax) c) Corporate & franchise tax - Progressive d) Property tax – Proportional (value of property is taxed at flat rate) e) State Sales Tax – Proportional
12.
Who uses a) Property Tax – State Local b) Excise Taxes – All three (State, federal, and local) c) Sales – State and Local d) Income Tax – Federal, State, Local e) Employment – Federal, State, and Sometimes Local
15.
* Primary objective of federal income tax is to raise revenues for government operations. * secondary objectives of federal income tax include: * to stimulate and encourage certain activities by providing tax credits or allowing a deduction to taxable income. These are activities such as: * Encourage research activities that will in turn strengthen the competitiveness of U.S companies (credit provided) * Encourage Venture Capital for small businesses (reduced tax rate) * Stimulate investment (tax deduction for small business equipment) * to encourage or discourage certain socially desirable or undesirable activities, such as: * charitable contributions (deductible) * claiming of deduction for any activity contrary to public policy is prohibited.
17.
Taxpaying entities generally are required to pay income taxes on their taxable income. Flow-through entities, on the other hand, generally do not directly pay income taxes but merely pass the income on to a tax paying entity.Flow-through entity is a legal entity where income "flows through" to investors or owners; that is, the income of the entity is treated as the income of the investors or owners (Taxpaying entities) and is not subject to a double taxation.
20.
“Double taxation” on C Corporations refers to the corporation paying income tax on its taxable income and then shareholders paying income tax on any dividends paid