Which Three of the Following Accurately Describe Taxation of an Individual's

question 44

Multiple Choice

Which three of the following accurately describe taxation of an individual's capital gains in the UK or US?

• A) Taxation on shares held for a number of years falls considerably.
• B) Taxation policy encourages people with high income to buy shares which provide high dividends.
• C) Tax is only paid on realised gains.
• D) Capital gains are taxed at the individual's marginal rate.

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Definitions:

Shortage/Surplus

A market condition where the quantity demanded exceeds the quantity supplied (shortage) or the quantity supplied exceeds the quantity demanded (surplus).

Price Ceiling

a legally imposed maximum price on goods or services, above which they may not be sold to prevent market prices from rising too high.

Price Floor

A government or regulatory-imposed price control that sets the minimum price at which a good can be sold, often to protect producers or encourage certain activities.

FICA Tax

The Federal Insurance Contributions Act (FICA) tax is a United States federal payroll tax imposed on both employees and employers to fund Social Security and Medicare programs.