A Reduction in Tax Rates May Result in a Short-Term

question 28

True/False

A reduction in tax rates may result in a short-term reduction in government revenues, but it will also leave people with more disposable income.

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Definitions:

CESA Contribution

Contributions made to a Coverdell Education Savings Account that are designated for financing educational expenses.

Annuity Contract

A financial product sold by financial institutions that offers fixed or variable payments to an individual over time, often used for retirement savings.

Deductible IRA Contribution

A contribution to an Individual Retirement Account that can be subtracted from gross income for tax purposes.

Pension Plan

Pension Plan is a type of retirement plan where an employer contributes to a pool of funds set aside for employees' future benefit, distributed upon retirement.