Asked by Morgan Beasley on Apr 30, 2024
Verified
Statement I: Compared to citizens of other leading industrial countries,Americans are overtaxed.
Statement II: We could make the payroll tax less regressive by raising the wage-base limitation to $200,000.
A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.
Overtaxed
A condition where individuals or entities are subject to excessive tax rates relative to their income or profit.
Payroll Tax
Levies charged to both employers and employees, based on a percentage of the wages that employees receive from their employers.
Wage-Base Limitation
A ceiling on the amount of an employee's income that is subject to certain taxes or contributions.
- Gain an understanding of the diverse categories of taxation, such as proportional, progressive, and regressive taxes, and their repercussions.
- Gain an understanding of the funding sources for government operations and the effects of tax regulations on disparate income categories.
Verified Answer
TK
Tedman KeddyMay 03, 2024
Final Answer :
B
Explanation :
Statement I is false because, in comparison to citizens of other leading industrial countries, Americans are generally taxed at lower rates. Statement II is true because raising the wage-base limitation for payroll taxes would indeed make the tax less regressive by subjecting higher incomes to payroll taxes, thereby spreading the tax burden more evenly across different income levels.
Learning Objectives
- Gain an understanding of the diverse categories of taxation, such as proportional, progressive, and regressive taxes, and their repercussions.
- Gain an understanding of the funding sources for government operations and the effects of tax regulations on disparate income categories.