2015-08-12
1612
1. Capital gains are generally taxed at a higher rate than income.
b) True; b) False
2. The same sum of money can be taxed more than once.
b) True; b) False
3. Sales taxes can be both proportional and progressive at the same time.
b) True; b) False
4. Excise duties are extra sales taxes on selected products.
b) True; b) False
5. Many international companies have their registered headquarters in small countries where they do only a small proportion of their business.
b) True; b) False
6. Employees will generally pay less tax if their employer reduces their salary a little and provides them with a car.
a) True; b)False
7. Tax avoidance is illegal.
b) True; b) False
8. Perks and loopholes are forms of tax evasion.
b) True; b) False
Exercise 2.5 What are the standard names for the tax or taxes paid on the following?
1. alcoholic drinks and tobacco products
a) capital transfer tax;
b) excise taxes;
c) income tax
2. company profits
a)corporation tax;
b) tariffs;
c) value-added tax;
3. goods bought in stores
a) estate tax;
b) VAT;
c) national insurance;
4. money received from relatives after death
a) excise duty;
b) GST;
c) estate tax;
5. salaries and wages
a) capital gains tax;
b) sales taxes;
c) income tax;
6. goods made in other countries
a) tariffs;
b) GST;
c) excise duties;
7. money made by selling stocks at a profit
a) capital gains tax;
b) sales tax;
c) inheritance tax;
Exercise 2.6 Complete the sentences with the missing words.
1. Governments finance most of their expenditure by ______.
2. ______ are collected by the government from the income of individuals and businesses.
3. ______ are levied on the production or sale of goods and services. They are included in the price paid by the final purchaser.
4. Using legal methods to minimize your tax burden is called ______.
5. Using illegal methods – such as not declaring your income, or reporting it inaccurately – is called ______.
