101. Tax evasion is a. facilitated by legal deductions to taxable income. b. the same as tax avoidance. c. recommended by the American Accounting Association. d. illegal. 102. When tax laws give preferential treatment to specific types of behavior it is called a. tax evasion. b. a political payoff. c. a tax loophole. d. compensation for the benefit of society. 103. In many cases tax loopholes are designed by Congress to a. give special treatment to specific types of behavior. b. reduce the overall administrative burden of the tax system. c. reduce the headache of filling out tax forms. d. All of the above are correct. 104. A mortgage interest deduction would be considered a. tax evasion. b. a subsidy to the poor. c. a deduction that benefits all members of society equally. d. a tax loophole. 105. The U.S. tax code gives preferential treatment to investors in municipal bonds. This is an example of a a. tax loophole. b. tax evasion. c. administrative burden. d. tax enforcement. 106. As tax laws become more complex a. the administrative burden of taxes is increased. b. compliance costs are most likely to decrease. c. the government always collects more in tax revenue. d. the amount of tax revenue lost to tax evasion always decreases. 107. Which of the following is NOT an administrative burden of our tax system? a. government resources used to enforce tax laws b. keeping tax records throughout the year c. making charitable contributions at the end of the year for tax deductions d. time spent in April filling out forms 108. The deadweight loss of an income tax is determined by the a. amount of total tax revenue to the government. b. marginal tax rate. c. average tax rate. d. loss in consumer surplus when the tax is imposed. 109. A tax on all forms of income will a. lower the effective rate of interest on savings. b. increase the potential income from saving. c. increase the amount of income received in the economy. d. enhance the incentives to save. 110. Given the table what is the average tax rate for a person who makes $60 000? a. 20% b. 30% c. 40% d. 50%
