Since Its Inception in 1935, Two Trends Have Increased the Cost

question 36

Multiple Choice

Since its inception in 1935, two trends have increased the cost of the Social Security program. One is that the proportion of people who reach age 65 has increased dramatically. What is the other trend?

• A) Due to revisions of the original law, Social Security now represents a primary source of income for many.
• B) The rate of chronic illnesses has been going up since 1935.
• C) People's incomes have been declining since 1935.
• D) People are now saving more money for retirement than ever before.

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Definitions:

Ronald Reagan

The 40th President of the United States, serving from 1981 to 1989, known for his economic policies known as "Reaganomics".

Marginal Tax Rate

The rate at which the last dollar of income is taxed, indicating the proportion of any additional dollar of income that will be taken as tax.

Lump-Sum Tax

A tax that is a fixed amount, not dependent on the taxpayer's income level or assets' value.

Average Tax Rate

The fraction of total income that is paid in taxes, calculated by dividing the total taxes paid by the total taxable income.