Test Bank for Pearson's Federal Taxation 2024 Individuals, 37th Edition by Franklin
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Course
Federal Taxation
Institution
Federal Taxation
Test Bank for Pearson's Federal Taxation 2024 Individuals 37th Edition 37e by Mitchell Franklin; Luke E. Richardson. Full Chapters test bank are included - Chapter 1 to 18
An Introduction to Taxation
Determination of Tax
Gross Income: Inclusions
Gross Income: Exclusions
Property Transactions...
Pearson’s Federal Taxation 2024: Individuals, 37e (Franklin)
Chapter I1: An Introduction to Taxation
LO1: History of Taxation in the United States
1) The federal income tax is the dominant form of taxation by the federal government.
Answer: TRUE
Explanation: The federal income tax provides more revenues than any other tax.
Page Ref.: I:1-2
Objective: 1
2) The Sixteenth Amendment to the U.S. Constitution permits the passage of a federal income tax law.
Answer: TRUE
Explanation: The Sixteenth Amendment amended the Constitution to permit the imposition of an
income tax.
Page Ref.: I:1-2
Objective: 1
3) When a change in the tax law is deemed necessary by Congress, the entire Internal Revenue Code must
be revised.
Answer: FALSE
Explanation: The federal income tax law is changed on an incremental basis.
Page Ref.: I:1-3
Objective: 1
4) The largest source of federal revenues is the corporate income tax.
Answer: FALSE
Explanation: The largest source is the individual income tax.
Page Ref.: I:1-3
Objective: 1
5) Until about 100 years ago, aQempts to impose a federal income tax were ruled unconstitutional. The
amendment to the U.S. Constitution allowing the imposition of a federal income tax is the
A) Second Amendment.
B) Thirteenth Amendment.
C) Sixteenth Amendment.
D) Nineteenth Amendment.
Answer: C
Explanation: The Sixteenth Amendment, ratified in 1913, gave Congress the power to impose a federal
income tax.
Page Ref.: I:1-2
Objective: 1
1
, 6) The largest source of revenues for the federal government comes from
A) individual income taxes.
B) corporate income taxes.
C) Social Security and Medicare taxes (FICA).
D) estate and gift taxes.
Answer: A
Explanation: The individual income tax has provided the largest source of revenues for many years.
Page Ref.: I:1-3
Objective: 1
LO2: Types of Tax Rate Structures
1) A progressive tax rate structure is one where the rate of tax increases as the tax base increases.
Answer: TRUE
Explanation: Under a progressive tax system, the rate increases as the tax base increases.
Page Ref.: I:1-4
Objective: 2
2) The terms "progressive tax" and "flat tax" are synonymous.
Answer: FALSE
Explanation: A proportional, not progressive, tax and flat tax are synonymous.
Page Ref.: I:1-4
Objective: 2
3) A proportional tax rate is one where the rate of the tax is the same for all taxpayers, regardless of
income levels.
Answer: TRUE
Explanation: A proportional tax is essentially a flat tax.
Page Ref.: I:1-4
Objective: 2
4) Regressive tax rates decrease as the tax base increases.
Answer: TRUE
Explanation: Regressive rates increase as the base decreases.
Page Ref.: I:1-5
Objective: 2
5) The marginal tax rate is useful in tax planning because it measures the tax effect of a proposed
transaction.
Answer: TRUE
Explanation: The marginal rate applies to the planned addition to income or reduction to income.
Page Ref.: I:1-5
Objective: 2
2
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