QUIZ: Taxes - Then and Now

QUIZ: Taxes - Then and Now

Tax policy has been the talk of Wall Street and Washington recently, with the so-called Bush tax cuts on the verge of expiring. For investors and non-investors alike, it also happens to be the time of year that many Americans make last-minute moves to limit their tax bill come April. Given all the attention, we thought we'd test your knowledge of taxes.

Posted 14 December 2010

What was the highest tax rate when President Ronald Reagan took office in 1981?

1. 80%
2. 70%
3. 75%
4. 60%

The last president to cut taxes was John F. Kennedy, who lowered the top rate from 90 percent to 70 percent. The Economic Recovery Act of 1981 lowered it to 50 percent.

SOURCE: Congressional Budget Office | Effects Of The 1981 Tax Act On The Distribution Of Income And Taxes Paid

What percentage of taxpayers occupy the top two tax brackets?

1. 1.5%
2. 2.5%
3. 3.5%
4. 4.5%

This applied to individuals with incomes of $200,000 or more and joint filiers with incomes of $250,000 or more. At that level, the tax rate is 33 percent . It goes as high as 35 percent.

SOURCE: In Tax Cut Plan, Debate Over the Definition of Rich | CNBC.com

When was the first income tax imposed in the U.S.?

1. 1862
2. 1891
3. 1913
4. 1921

Though the income tax as we know it was first imposed in 1913, the first such tax was in 1962 and was used to help pay for the Civil War. Sales, excise and inheritance taxes were also imposed.

SOURCE: Income Tax Records of the Civil War Years | Prologue Magazine

Which of the states below has no individual or corporate taxes?

1. Nevada
2. Texas
3. Wyoming
4. Alaska

Wyoming is one of two states that have neither an individual income tax nor corporate income tax. Washington is the other.

SOURCE: State Income Taxes | Federation of Tax Administrators

Which state has the highest gasoline tax in the nation?

1. California
2. Connecticut
3. Hawaii
4. New York

Californians pay 46.6 percent per gallon. Residents in Hawaii, New York and Connecticut are not far behind, paying more than 40 cents a gallon.

SOURCE: State Sales, Gasoline, Cigarette, and Alcohol Tax Rates by State, 2000-2010 | Tax Foundation

What percentage of Americans pays no federal income taxes?

1. 17 percent
2. 27 percent
3. 37 percent
4. 47 percent

Almost one out of two in recent years. Either they didn't have enough income to qualify or they were able to reduce it through credits, deductions and exemptions to eliminate their liability, according to the Tax Policy Center, a Washington research organization.

SOURCE: Half of U.S. Pays No Federal Income Tax | MSNBC.com

The US tax code once allowed people to deduct credit card interest on their taxes. True or false?

1. True
2. False

True. Deduction of interest in any number of ways is almost as old as the tax code. The one on credit cards was eliminated along with other kinds of consumer debt in the tax reform act of 1986.

SOURCE: General Explanation of the Tax Reform Act of 1986 | Joint Committee on Taxation

What is the highest personal tax rate for individual in Britain?

1. 40 percent
2. 50 percent
3. 55 percent
4. 60 percent

A new 50 percent tax rate for top earners went into effect in April 2010. The previous top rate was 40 percent. The new rate will affect the 300,000 highest earners (150,000 British Pounds or more)--about 1 percent of all taxpayers.

SOURCE: Tax – In England | Advice Guide

Which OECD country has only one income-tax bracket?

1. Greece
2. Ireland
3. Slovak Republic
4. Turkey

The Slovak Republic's single rate is 19 percent. Sweden has two. The neighboring Czech Republic has four. 19 percent.

SOURCE: Income Tax, 2005 | Organisation for Economic Co-operation and Development

Which country was the first to impose a value-added tax, VAT?

1. France
2. Germany
3. Sweden
4. Italy

France's came into effect on April. 10,1954. Something of a national sales tax, it is now common in Europe and other parts of the world. It typically applies to goods and services.

SOURCE: Value Added Tax (VAT) | Economy Watch

Your score:

• You must be in a high tax bracket.
• You must be in a middle class tax bracket.
• You must be in a low tax bracket.