TABLE OF CONTENTS

Problems ..............................................................................................................................1

Bridge Discipline Problems ................................................................................................6

Research Problems.............................................................................................................7

PROBLEMS

1. (LO 1) Various answers are possible, including using the Key Terms at the end of each

chapter, referring to the Glossary (Appendix C), looking up the footnote resources to

the Internal Revenue Code in Appendix D, using chapter features (e.g., Global Tax

Issues, Ethics & Equity, Tax Planning, and Digging Deeper), examining the tax forms

used in the chapters, and completing additional end-of-chapter assignments. All of

these resources will help students engage more deeply with the materials and help

their understanding.

2. (LO 3, 5, 6) Some tax and nontax considerations James should investigate include the

following:

• State and local income taxes.

• State and local sales taxes.

• State and local property taxes.

• Employee implications of the move (Will James lose current employees? Is the

labor market better in the new location? Is cost of living lower or higher in new

location?).

• Logistics/transportation of products to customers (specifically document lower

costs).

• State infrastructure (better in new location?).

3. (LO 2) A tax is regressive if it represents a larger percentage of the income of a lowincome taxpayer relative to the income of a high-income taxpayer. Examples of

regressive taxes include sales and excise taxes. A tax is progressive if it represents a

larger percentage of the income of a high-income taxpayer relative to the income of a

low-income taxpayer. The Federal income tax is an example of a progressive tax.