If States Lacked the Power to Tax, Then How Would

question 59

Multiple Choice

If states lacked the power to tax, then how would state governments get their funding?

• A) They would need to enter into treaties with foreign countries to obtain funding.
• B) They would be in violation of the Constitution's provisions regarding interstate commerce.
• C) They would depend on the federal government to be able to function.
• D) They would pass the burden of funding their budgets to local governments.
• E) They would depend upon private donations from individuals and corporations.

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Definitions:

Participating Preferred Stock

A type of preferred stock that provides holders the right to dividend payments exceeding the basic fixed rate if the company meets specified financial performance criteria.

Common Shareholders

Individuals or entities that own shares of a company's common stock, granting them rights to dividends and voting in the company.

Dividends Paid

The portion of a company's earnings that is distributed to shareholders as a return on their investment.

Paid-in Capital

The total amount of money that shareholders have invested in a company through the purchase of its stock.