Which of the Following Is Not an Example of a Tax

question 14

Multiple Choice

Which of the following is not an example of a tax causing an economic dislocation?

• A) A high income individual chooses to invest in tax free municipal bonds over corporate bonds which have a higher advertised rate.
• B) A car dealership holds a gigantic sale to reduce its inventory before property taxes are assessed
• C) High income individuals pay a greater amount of taxes than do low income people, but high income individuals are not guaranteed more public services.
• D) None of the above-all are examples of dislocation.

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Definitions:

Embezzlement

The act of withholding assets for the purpose of conversion of such assets, by one or more individuals to whom the assets were entrusted.

Income Tax Deductions

Expenses that can be subtracted from gross income to determine taxable income, thereby reducing the overall tax liability.

Forgery

The illegal act of creating, altering, or imitating objects, documents, or signatures with the intention to deceive.

Federal Common Law

Federal common law refers to laws developed by Federal courts in the absence of detailed statutory guidance, often based on precedent or principles derived from the U.S. Constitution.