According to the Laffer Curve, When Tax Rates Are Low

question 241

Multiple Choice

According to the Laffer Curve, when tax rates are low, there is ________relationship between them and tax revenue.

• A) a positive
• B) a negative
• C) sometimes a positive, sometimes a negative
• D) an indeterminate

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Definitions:

Employer Payroll Tax

Taxes that employers are required to pay on behalf of their employees, including Social Security, Medicare, and unemployment taxes.

FICA Taxes

FICA Taxes are payroll taxes collected to fund the Social Security and Medicare programs, split between the employer and the employee.

Payroll Tax Expense

The taxes that employers are required to withhold and pay on behalf of their employees, including Social Security and Medicare taxes.

State Unemployment Taxes

Taxes paid by employers to the state to fund unemployment insurance programs for workers who have lost their jobs.