Which of the Following Is NOT a Fear Expressed by Opponents

question 35

Multiple Choice

Which of the following is NOT a fear expressed by opponents of steeply progressive taxes?

• A) Incentives to work will be reduced.
• B) Fewer individuals will be willing to take risks.
• C) Fewer families will choose to have children.
• D) Efficiency will fall as more effort is put into tax avoidance.
• E) The payoff to saving will fall.

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Definitions:

FMV

Fair Market Value, the price at which property would sell between a willing buyer and seller in an arm's length transaction.

Gift Tax

A federal tax on the transfer of property by gift from one individual to another with the donor being primarily responsible for paying the tax.

FMV

Fair Market Value, an estimation of the market value of a property or asset, based on what a knowledgeable, willing, and unpressured buyer would likely pay to a knowledgeable, willing, and unpressured seller in the market.

Adjusted Basis

The original cost of an asset adjusted for factors such as depreciation or improvements, used to calculate capital gains or losses for tax purposes.