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Lecture 4- Wealth: Policy & Practice
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Questions in this quiz (18)
1Wealth is [blank_start]command[blank_end] person has over [blank_start]economic[blank_end] resources. In a person's wealth you would include assets such as c[blank_start]ars[blank_end], p[blank_start]ension rights[blank_end], i[blank_start]nvestments[blank_end], b[blank_start]usiness interests[blank_end], b[blank_start]ank & cash[blank_end], e[blank_start]ducation[blank_end] ([blank_start]human capital[blank_end]), etc. In UK, wealth is [blank_start]unequally[blank_end] distributed & more [blank_start]unequally[blank_end] distributed than income
- Aeconomic
- Bcommand
- Cars
- Dension rights
- Envestments
- Fusiness interests
- Gank & cash
- Hducation
- Ihuman capital
- Junequally
- Kunequally
2One wealth tax in UK is [blank_start]capital gains tax[blank_end]. [blank_start]Capital gains tax[blank_end] is tax levied on the [blank_start]increase[blank_end] in value of an asset when it is disposed ([blank_start]capital gains[blank_end]). Some exemptions will be considered from [blank_start]capital gains tax[blank_end] to ensure businesses can be passed done generations [blank_start]efficiently[blank_end] & also to [blank_start]incentivise[blank_end] people to invest in business
- Acapital gains tax
- BCapital gains tax
- Cincrease
- Dcapital gains
- Ecapital gains tax
- Fefficiently
- Gincentivise
3Another wealth tax in UK is [blank_start]inheritance tax[blank_end]. This is tax levied on some [blank_start]transfers[blank_end] made in [blank_start]lifetime[blank_end] & [blank_start]estates[blank_end] on death of [blank_start]individuals[blank_end]
- Ainheritance tax
- Btransfers
- Clifetime
- Destates
- Eindividuals
4Third wealth tax in UK is [blank_start]council tax[blank_end]. This is tax on [blank_start]individuals[blank_end] & is an amount collected in order to pay for local facilities such as e[blank_start]ducation[blank_end], r[blank_start]ubbish collection[blank_end], l[blank_start]ibraries[blank_end] & s[blank_start]treet lighting[blank_end]. It is currently taxed on basis of [blank_start]size[blank_end] of house, but it is not [blank_start]current valuation[blank_end] of house. It is taxed according to [blank_start]tax bands[blank_end]. Therefore, all houses within one street/houses within certain area will be taxed in same band
- Acouncil tax
- Bindividuals
- Cducation
- Dubbish collection
- Eibraries
- Ftreet lighting
- Gsize
- Hcurrent valuation
- Itax bands
5Problem with council tax is that [blank_start]bands[blank_end] have not changed for many years & therefore, are not technically [blank_start]up to date[blank_end]. It has been suggested that there should be additional [blank_start]bands[blank_end] added to account for new very expensive houses in area to ensure [blank_start]richer[blank_end] people pay more
- Abands
- Bup to date
- Cbands
- Dricher
6Fourth wealth tax in UK is [blank_start]business rates[blank_end]. Businesses pay [blank_start]business rates[blank_end] & it depends on [blank_start]location[blank_end] of business i.e. businesses on [blank_start]high street[blank_end] are charged higher than those [blank_start]out in country[blank_end]
- Abusiness rates
- Bbusiness rates
- Clocation
- Dhigh street
- Eout in country
7Fifth wealth tax in UK is [blank_start]stamp duties[blank_end]. This is tax charged when [blank_start]land/shares[blank_end] are bought. Rate of [blank_start]stamp duties[blank_end] increase as value of [blank_start]property[blank_end] that is bought is higher
- Astamp duties
- Bland/shares
- Cstamp duties
- Dproperty
8Accessions tax- Tax on [blank_start]donee[blank_end] & is based on amount of [blank_start]capital[blank_end] received to encourage better [blank_start]distribution[blank_end] of wealth
- Adonee
- Bcapital
- Cdistribution
9Accessions tax may encourage people to gift to people who are [blank_start]less wealthy[blank_end] rather than being [blank_start]fixed[blank_end] amount that you own at [blank_start]present[blank_end]
- Aless wealthy
- Bfixed
- Cpresent
10Argument for accessions tax is that it may give better [blank_start]horizontal equity[blank_end] because it looks at [blank_start]donee[blank_end] not donor. For example, if there is someone who is quite rich & they do not have own children. They may look at nephews & nieces to inherit. If they leave to [blank_start]poorer[blank_end] nephew/niece, [blank_start]less tax[blank_end] would be paid. Therefore, it may encourage [blank_start]distribution[blank_end] of wealth to pass on to those who are [blank_start]less[blank_end] well off which would [blank_start]reduce[blank_end] inequality of wealth
- Ahorizontal equity
- Bdonee
- Cpoorer
- Dless tax
- Edistribution
- Fless
- Greduce
11Argument against accessions tax is that it does not [blank_start]reduce[blank_end] problem of only taxing wealth when it [blank_start]moves[blank_end]
- Areduce
- Bmoves
12Wealth tax refers to tax levied on [blank_start]net assets[blank_end] of individuals on a [blank_start]one-off[blank_end] or [blank_start]annual[blank_end] basis on a [blank_start]specific[blank_end] day
- Anet assets
- Bone-off
- Cannual
- Dspecific
13One advantage of wealth tax is [blank_start]efficiency[blank_end]. An annual wealth tax is [blank_start]efficient[blank_end] as it does not affect the incentive to work [blank_start]hard[blank_end] or apply for very [blank_start]productive[blank_end] & [blank_start]highly[blank_end] paid jobs. This is because [blank_start]accumulated[blank_end] wealth is taxed (past events), not the [blank_start]present[blank_end] income stream
- Aefficiency
- Befficient
- Chard
- Dproductive
- Ehighly
- Faccumulated
- Gpresent
14Another advantage of wealth tax is [blank_start]redistribution of wealth[blank_end]. Wealth tax is levy on [blank_start]existing[blank_end] wealth, so it could raise [blank_start]enough[blank_end] wealth to be [blank_start]redistributed[blank_end] from the [blank_start]richer[blank_end] to [blank_start]poorer[blank_end] members of society, leading to more [blank_start]equitable[blank_end] distribution of wealth than using [blank_start]income[blank_end] tax & [blank_start]inheritance[blank_end] tax
- Aredistribution of wealth
- Bexisting
- Cenough
- Dredistributed
- Ericher
- Fpoorer
- Gequitable
- Hincome
- Iinheritance
15Third advantage of wealth tax is [blank_start]administrative control[blank_end]. If an individual has to fill out form listing all their [blank_start]assets[blank_end], government would have more [blank_start]knowledge[blank_end] about how much you [blank_start]own[blank_end] & there would be less opportunity to [blank_start]avoid taxes[blank_end]. Therefore, there would be more [blank_start]administrative control[blank_end] over individual’s wealth
- Aadministrative control
- Bassets
- Cknowledge
- Davoid taxes
- Eadministrative control
- Fown
16One disadvantage of wealth tax is that using [blank_start]general[blank_end] wealth tax as a country's [blank_start]principal[blank_end] tax base can be [blank_start]administratively expensive[blank_end] than tax bases such as [blank_start]income[blank_end] tax. For this reason, assessing the [blank_start]current[blank_end] values of assets not available for sale currently is [blank_start]difficult[blank_end]. Also, people in developed countries hold wealth in assets that are [blank_start]difficult[blank_end] to value, i.e., pension rights. As a result, the value of the wealth tax may not reflect the [blank_start]actual[blank_end] value of the asset
- Ageneral
- Bprincipal
- Cadministratively expensive
- Dincome
- Ecurrent
- Fdifficult
- Gdifficult
- Hactual
17Another disadvantage of wealth tax is that it may have [blank_start]economic consequences[blank_end]. Wealth taxes may [blank_start]discourage[blank_end] people from [blank_start]investing[blank_end]
- Aeconomic consequences
- Bdiscourage
- Cinvesting
18Third disadvantage of wealth tax is that wealth tax may prevent the ability to [blank_start]raise revenue[blank_end]. For example, when wealth tax was introduced in France, [blank_start]many millionaires[blank_end] left country. This affected the ability to [blank_start]raise revenue[blank_end] from other taxes such as [blank_start]income tax[blank_end] as well as wealth tax itself
- Araise revenue
- Bmany millionaires
- Craise revenue
- Dincome tax
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- Highers Accounting and Finance (Year 3) (AF3406- Taxation: Economics, Policy & Practice) Quiz on Lecture 4- Wealth: Policy & Practice, created by George Mariyajohnson on 19/12/2021.
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- George Mariyajohnson
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- English
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- Created on 19 Dec 2021 · updated on 19 Dec 2021
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