Answer the following statements true (T) or false (F)

Question

1. While federal and state income taxes, as well as the federal gift and estate taxes, are generally progressive in nature, property taxes are proportional.
2. Adam Smith's canons of taxation are equity, certainty, convenience, and economy.
3. The primary objective of the federal income tax law is to achieve various economic and social policy objectives.
4. Individuals are the principal taxpaying entities in the federal income tax system.
5. The various entities in the federal income tax system may be classified into two general categories, taxpaying entities (such as individuals and C [regular] corporations) and flow-through entities such as sole proprietorships, partnerships, S corporations, and limited liability companies.

Answer 1

1. TRUE
Property taxes are assessed on the value of property.
2. TRUE
Adam Smith's canons of taxation include equity, certainty, convenience and economy.
3. FALSE
The primary objective of the federal income tax law is to raise revenues for government operations.
4. TRUE
Revenues from income taxation of individuals far exceed those of other taxpayers.
5. TRUE
Certain business entities do not pay tax; the income is passed through to the business owners. The business owners pay the tax on the taxable income earned by the entity as part of their tax liability.