Which of the following statements is true?
A) Because the federal income tax system is progressive, measuring poverty using after-tax incomes results in a higher poverty rate than if poverty is measured using before-tax incomes.
B) In the United States, income remaining after federal taxes are paid is more equally distributed than income before taxes.
C) If non-cash benefits such as food stamps and rent subsidies were added to the incomes of low-income families, poverty would be eliminated.
D) If transfer payments such as Social Security payments to the retired and disabled were excluded from official statistics used to estimate the percentage of people with incomes below the poverty line, the amount of poverty in the United States would be much greater.
B
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Allen and Ellen both work at Burger Ranch. Allen is paid more than Ellen. Which of the following could explain why Allen is paid more?
a. The manager discriminates against women. b. Allen works the undesirable early morning shift. c. Allen has more experience and so more human capital. d. All of the above could be correct.
During the Reagan administration, the Laffer curve was used to argue that:
A. the supply-side effects of tax cuts are relatively small. B. discretionary tax cuts are unwise because they create stagflation. C. lower income tax rates could increase tax revenues. D. a "flat tax" would simplify the tax code and stimulate economic growth.