Write the letter of your choice on the space provided before each number. Thus, A – if only the 1 st statement is CORRECT ; B- if only the 2 ND statement is CORRECT ; C - if both 1 st and 2 nd...

 Write the letter of your choice on the space provided before each number. Thus,
A
– if only the
1^st
statement is CORRECT;
B-
if only the
2^ND
statement is CORRECT;
C- if both
1^st
and 2^nd
statements are CORRECT
and
D- if both
1^st
and 2^nd
statements are INCORRECT.

_____ 1. Tax is an instrument of fiscal policy. It is the inherent power of the state to demand enforced contributions from the people for public purposes.

_____ 2. Theoretical Justice refers to the “ability to pay” principle. This means that tax burden must be proportion to the taxpayer’s level of income.

_____ 3. Indirect Taxes are taxes levied by the government on goods and services in order to raise revenue. These taxes cannot be shifted on to consumers.

_____ 4. Progressive taxes place a greater burden on those best able to pay. Value added tax is a progressive tax.

_____ 5. Proportional taxes are taxes levied at a constant rate. These taxes place an equal burden on the rich, the middle class, and the poor.