12.) Which is more appropriate tax rate to use to compare taxpayers’ tax burdens-the average or the effective tax rate? Why?
-Effective tax rate would be the most appropriate because it provides a better depiction of a taxpayer’s tax burden. The reason for this is because it depicts the taxpayer’s total tax paid as a ratio of the sum of both taxable and nontaxable income earned.

14.) Arnold and Lilly have recently had a heated discussion about whether a sales tax is a proportional tax or a regressive tax. Arnold argues that a sales tax is regressive. Lilly counters that the sales tax is a flat tax. Who is correct?
-Arnold and Lilly are both correct. The reason Lilly is correct is because a sales tax by definition is a proportional tax. As taxable purchase increase the sales tax rate (marginal tax rate) remains constant. Arnold is correct because one’s total income spent on taxable purchases likely decreases as total income increases, so the sales tax may be considered a regressive tax.

16.) What is the tax base for the Social Security and Medicare taxes for an employee or employer? What is the tax base for Social Security and Medicare taxes for a Self-employed individual? Is the Self-employment tax in addition to or in lieu of federal income tax?
-The tax base for the Social Security and Medicare taxes for an employee or employer is the employee wage. The tax base for Social Security and Medicare taxes for a Self-employed individual is the Net earnings from the Self-employment. The Self-employment tax is in addition to the federal income tax.

17.) What are unemployment taxes?
-Unemployment taxes are taxes paid by employers into a federal or state fund that pays for temporary unemployment benefits for individuals terminated from their jobs without cause.

21.) What is the difference between a sales tax and a use tax?
-Sales tax is a tax