Suppose fairness is defined as those with the highest incomes can afford to pay a greater proportion of their income in taxes. Then which of the following taxation systems would be consistent with this notion of fairness?
a. A true flax tax.
b. A flat sales tax on consumption purchases.
c. A progressive tax on income.
d. A fixed federal tax of $5,000 that everyone pays regardless of income status.
c
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Which of the following events would most likely reduce aggregate demand?
A. An increase in real interest rates. B. An increase in expected returns on investment. C. A reduction in business and personal tax rates. D. A reduction in the amount of existing capital stock.
Refer to Scenario 18.1. When Curly made the loans to Larry and Shemp, the money supply
A) did not change. B) decreased by 300 coins. C) increased by 300 coins. D) increased by 500 coins.
Real-wage rigidity in the Keynesian efficiency wage diagram of the labor market is depicted by
A) a vertical labor supply curve at the efficient level of employment, B) a vertical labor demand curve at the efficient level of employment. C) a horizontal line at the efficiency wage. D) a steep, positively sloped labor supply curve depicting various efficiency wages at various employment levels.
Other things constant, a reduction in the real interest rate will
a. cause consumers to cut back on their purchases of durable items like automobiles. b. induce businesses to increase their level of investment. c. increase the natural rate of unemployment. d. increase the actual rate of unemployment.